The Impact of Investment on Construction on Iran's Interest Rate

Karbasi, Alireza; Mohammadzadeh, Seyed Hossein

The Impact of Investment on Construction on Iran's Interest Rate

Document Type : Review Article

Authors

دانشگاه فردوسی

Abstract

The importance of the housing sector and its relation to macroeconomic variables and its role as a stimulus of the banking system is one of the important topic in the economy of Iran. On average there is 40% investment in the housing sector annually. In this study investigated the effect of investment in housing on short-term bank interest rates using the autoregressive distributed lag model(ARDL) and seasonal data of Iranian economy during the period 1973- 2016. The results of the model showed that there is significant and negative correlation between investment in construction and bank interest rates in the short run. But there is not a significant relationship between pattern variables and bank interest rates in the long run. The estimatation of error coloration Model (ECM) showed that there is a little speed to adjust to the equilibrium.

Keywords

Main Subjects