Investigating the Spillover of Trade Partners' World Uncertainty Index on Iran's Gross domestic product: GVAR Approach

Document Type : Scientific-research

Authors

1 university of tabriz

2 دانشکده اقتصاد و مدیریت دانشگاه تبریز

10.30465/ce.2025.50269.1992

Abstract

The purpose of this study is to examine the spillover of the world uncertainty index of trading partners (China, India, Switzerland, Germany, the United Arab Emirates, Russia, Turkey, South Korea, and Italy) on Iran's GDP. This paper was conducted over the period 2000-2020 using the GVAR regression approach. The results show that major uncertainty shocks of trading partners are considered a negative factor and reduce Iran's GDP. Among trading partners other than the United Arab Emirates, whose uncertainty shock reduces Iran's GDP by 1.5 percent, the impact of uncertainty shocks of other trading partners on Iran's GDP is less than 0.5 percent. According to the results, it is suggested that policymakers take steps to help the growth and development of the economy by implementing policies to stabilize the economy and reduce domestic uncertainty. On the other hand, when designing trade policies, it took into account the differences and effects of shocks in partner countries and protected itself from the risk of uncertainty in trading partners by diversifying trading partners.

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