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The Effects of Macroeconomic Variables on the Determination of Bank Credit Rate of Usury- Free- Banking in Iran

Author

Listed:
  • Shahrbanou Fallah

    (Islamic Banking, Islamic Azad University, Ajabshir Branch, Ajabshir, Iran,)

  • Ali Shahinpour

    (Doctor of Economics, Islamic Azad University, Ajabshir Branch, Ajabshir, Iran,)

  • Ali Satari

    (Department of Management, NABI AKRAM College, Tabriz, Iran.)

Abstract

The study has used Auto Regressive Distributed Lag method to estimate the effects of independent variables on the dependent variable. According to findings, the impact inflation rate on bank credit rate is positive in short run, so that the impact of this variable has been effective on bank credit rate after one year delay on dependent variable. The reel per capita gross domestic product alters the banking credit rates toward the positive direction. The short run impact of legal reserve rate on bank credit rates is positive. The effects of inflation rate, GDP, and legal reserve rate variables are positive on the bank credit rate. Thus, the Fisher hypothesis is confirmed in Iranian context. Error correction coefficient links the speed of the short-run variable fluctuations to the long-run equilibrium amount i.e. the short-run imbalances of dependent variable decreases 19% annually and moves to the long-run equilibrium.

Suggested Citation

  • Shahrbanou Fallah & Ali Shahinpour & Ali Satari, 2018. "The Effects of Macroeconomic Variables on the Determination of Bank Credit Rate of Usury- Free- Banking in Iran," International Journal of Economics and Financial Issues, Econjournals, vol. 8(4), pages 199-205.
    • Handle: RePEc:eco:journ1:2018-04-25
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    References listed on IDEAS

    as
    1. Dilek Teker & Elçin Aykaç Alp & Oya Kent, 2012. "Long-Run Relation between Interest Rates and Inflation: Evidence from Turkey," Journal of Applied Finance & Banking, SCIENPRESS Ltd, vol. 2(6), pages 1-4.
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    More about this item

    Keywords

    Macroeconomic Variables; Bank Credit Rate; Usury- Free- Banking;
    All these keywords.

    JEL classification:

    • E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy

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