Evaluating the asymmetric impacts of fiscal policy and trade development on financial development in Iran using the nardl nonlinear model

The present study evaluated the symmetrical and asymmetrical effects of fiscal policy and trade development on financial development in Iran during 1973-2017.The Johansen-Jocilus method was used to investigate the symmetric effects and the (NARDL) model was used to investigate the asymmetric effects. The results of the symmetric method show that in the long run, the increase in Government Expenditure and inflation have a significant negative effect on financial development. The results show that trade development has a positive and significant effect. Also, the results of the VECM model indicated that in each period, 0.078 of the imbalance or short-run error is adjusted towards the long-run equilibrium. also, the results of the NARDL method show that the positive shock of government expenditure has a negative effect and the negative shock of government expenditure has a positive and significant effect on financial development. the positive trade shock has a positive effect and negative trade shock has a negative effect on financial development. Also, the results show that inflation has a significant negative effect on financial development. Finally, the results of the wald test show that the effects of government expenditure shocks and trade are asymmetric in both the short and long run.The present study evaluated the symmetrical and asymmetrical effects of fiscal policy and trade development on financial development in Iran during 1973-2017.The Johansen-Jocilus method was used to investigate the symmetric effects and the (NARDL) model was used to investigate the asymmetric effects. The results of the symmetric method show that in the long run, the increase in Government Expenditure and inflation have a significant negative effect on financial development. The results show that trade development has a positive and significant effect. Also, the results of the VECM model indicated that in each period, 0.078 of the imbalance or short-run error is adjusted towards the long-run equilibrium. also, the results of the NARDL method show that the positive shock of government expenditure has a negative effect and the negative shock of government expenditure has a positive and significant effect on financial development. the positive trade shock has a positive effect and negative trade shock has a negative effect on financial development. Also, the results show that inflation has a significant negative effect on financial development. Finally, the results of the wald test show that the effects of government expenditure shocks and trade are asymmetric in both the short and long run.The present study evaluated the symmetrical and asymmetrical effects of fiscal policy and trade development on financial development in Iran during 1973-2017.The Johansen-Jocilus method was used to investigate the symmetric effects and the (NARDL) model was used to investigate the asymmetric effects. The results of the symmetric method show that in the long run, the increase in Government Expenditure and inflation have a significant negative effect on financial development. The results show that trade development has a positive and significant effect. Also, the results of the VECM model indicated that in each period, 0.078 of the imbalance or short-run error is adjusted towards the long-run equilibrium. also, the results of the NARDL method show that the positive shock of government expenditure has a negative effect and the negative shock of government expenditure has a positive and significant effect on financial development. the positive trade shock has a positive effect and negative trade shock has a negative effect on financial development. Also, the results show that inflation has a significant negative effect on financial development. Finally, the results of the wald test show that the effects of government expenditure shocks and trade are asymmetric in both the short and long run.The present study evaluated the symmetrical and asymmetrical effects of fiscal policy and trade development on financial development in Iran during 1973-2017.The Johansen-Jocilus method was used to investigate the symmetric effects and the (NARDL) model was used to investigate the asymmetric effects. The results of the symmetric method show that in the long run, the increase in Government Expenditure and inflation have a significant negative effect on financial development. The results show that trade development has a positive and significant effect. Also, the results of the VECM model indicated that in each period, 0.078 of the imbalance or short-run error is adjusted towards the long-run equilibrium. also, the results of the NARDL method show that the positive shock of government expenditure has a negative effect and the negative shock of government expenditure has a positive and significant effect on financial development. the positive trade shock has a positive effect and negative trade shock has a negative effect on financial development. Also, the results show that inflation has a significant negative effect on financial development. Finally, the results of the wald test show that the effects of government expenditure shocks and trade are asymmetric in both the short and long run.