Document Type : Original Article
Authors
Department of Economics, Ar.C., Islamic Azad University, Arak, Iran.
Abstract
This study aims to investigate the effect of inflation uncertainty on the efficiency of financial institutions in Iran. To conduct this study, statistical data from the period 1980 to 2022 related to the Iranian economy and a regression analysis using the Autoregressive distributed lag (ARDL) method were used. In the model, the variables of inflation uncertainty and inflation rate, exchange rate uncertainty and exchange rate growth, corruption control, government efficiency, and economic growth were used as explanatory variables to explain the behavior of efficiency financial institutions. The results obtained in this study show that during the period under study, inflation and inflation uncertainty have increased the efficiency of financial institutions, but exchange rate growth and exchange rate uncertainty have decreased the efficiency of financial institutions. The results also indicate a positive effect of institutional quality indicators and no significant effect of economic growth on the efficiency of financial institutions. These findings reaffirm the importance of paying attention to the stability of the foreign exchange market and improving institutional quality in the current conditions of the Iranian economy.
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