Investigating the relationship between economic policy uncertainty and the risk of falling stock prices

In this study, monetary and fiscal policies in Iran as a tool available to the central bank and the government are introduced and the risk of stock price collapse in the stock market is selected as a dependent variable. The period studied in this research is from August 1997 to the end of 2017 in the form of monthly data. Therefore, the number of observations for each of the studied variables is 248. Time series and self-regression analysis with distributed interval were used to investigate the relationship between variables. Finally, in model estimation, it was found that the money supply index resulting from the central bank's policy does not affect the risk of falling stock prices, which also occurred due to the alignment between the independent variables that are economic policies. On the other hand, the supply of money from oil exports, banking network facilities, the supply of bonds and the offering of shares of state-owned companies on the stock exchange have a significant impact on the risk of falling stock prices. Therefore, the Iranian government has full control and control over the stock exchange and can help increase market stability by being stable in the selection and implementation of economic policies.