The Investigation of Financialization Phenomenon in Iran’s economy

Document Type : Review Article

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Abstract

Financialization phenomenon refers to the increasing role of financial motives, financial actors and financial institutions in the economy of a country that are determined by inverse relation between capital market development and economic growth. financialization phenomenon leads to a reduction in real investment and thus economic slowdown or even recession and increasing inequality of income and wealth. This study investigates the occurrence of the phenomena of financialization in Iran’s economy during the 1380-1393 by using Toda and Yamamoto causality test and correlation coefficients. The results show that the growth of capital markets has a significant effect on economic growth, in the long term growth of capital market have a direct effect on economic growth, but its effect is reversed at the beginning of the year 1392, in other words, Iran's economy is faced with a financialization phenomenon in 1392. Although a financialization phenomenon the threat to the economy but can be a threat into an opportunity for finance companies and development of the country.

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References

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Quarterly Journal of The Macro and Strategic Policies
Volume 6, Issue 22
August 2018
Pages 61-80

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