Impact of stock market development and inflation on economic growth in Iran

younes baryani¹ Shahen abdolla zadeh²

1) master of economic, tabriz university, tabriz. iran,
2) master of economic, oromia university, oromia, iran,

IOI Code : XCBA-EDEHC
Publication : 3 rd Conference on Industrial Engineering, Economics and Management (iemconf.com/2nd)
Abstract :
    One of the basic objectives of the countries is to achieve sustainable economic growth and economic development. The relationship between stock market development and economic growth is one of the major topics discussed in recent decades. The stock market is furnishing the resources and by allocating them to productive investments, it will increase inventory investment and thereby increased productivity, which will bring higher growth rate in entire economy structure. Given that, stock market development plays an essential role in economic growth and development, the association between stock market development and growth seems to be necessary. Since the effect of the stock market is dependent to several factors including inflation, the role of inflation is also considered. In this regard, this article examines the impact of stock market development and inflation on economic growth in Iran during the period of 1393-1362 by usage of the regression model with distributive lags (ARDL). The results of the study show that during the inspected interval, the short-term and long-term developments of the stock market had positive impact on economic growth. However, inflation rate has negative impact on economic growth in Iran. Notably, the volume of liquidity also had positive impact on economic growth in short and long term periods.

Keywords : stock market development inflation rate liquidity volume economic growth ardl