Document Type : Original Article
Authors
1
Ph.D. Candidate, Department of Economics, Faculty of Human Sciences, Isfahan (Khorasgan) Branch, Islamic Azad University, Isfahan, Iran.
2
Associate Professor, Department of Economics, Faculty of Human Sciences, Isfahan (Khorasgan) Branch, Islamic Azad University, Isfahan, Iran.
3
Assistant Professor, Department of Economics, Faculty of Human Sciences, Isfahan (Khorasgan) Branch, Islamic Azad University, Isfahan, Iran.
10.22034/jdesd.2025.9599.1318
Abstract
Fluctuations in GDP around its long-term growth trend give rise to business cycles. Periods when GDP is below (or above) its long-term trend indicate economic recessions (or prosperity). Global uncertainties—stemming from factors such as financial crises, political and trade conflicts, and epidemic diseases—create conditions of uncertainty under which policymakers’ ability for predicting future outcomes are limited, making effective planning challenging, and negatively impacting business cycles. The aim of this study is to analyse the impact of global uncertainties on Iran's business cycles between 1999:4 and 2022:4. Business cycles were extracted using the Hodrick-Prescott Filter, and the Quantile Autoregressive Distributed Lag (QARDL) method was employed to estimate the model. The results for the lower (0.25), middle (0.5), and upper (0.75) quantiles of business cycles indicate a recessionary effect of global uncertainty across all three quantiles, with similar magnitudes. The integrity of the legal system and the mobility of capital and people exert an anti-recession effect across all quantiles, although their impact diminishes at the upper quantile. Sound money had a recessionary effect only at the high quantile. The results of the Wald test suggest that the effects of all variables are symmetric across quantiles in the short term. In the long term, however, global uncertainty has a symmetric effect across all quantiles, while the effects of other variables are asymmetric. The error correction coefficient indicates that 11% of short-term imbalances are adjusted each period, converging towards the long-term trend.
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