Iran's Economic Resilience under the Influence of Political Risk, Economic Risk and Financial Risk

Document Type : Research Paper

Authors

Department of Economic Sciences, Faculty of Humanities and Social Sciences, University of Kurdistan, Sanandaj, Iran.

Abstract

One of the most important issues that economic policymakers in any country must focus on strengthening in the face of crises affecting society is enhancing economic resilience. This is because economic resilience refers to maintaining an economy's ability to confront internal and external shocks, return to its equilibrium path, and sustain stable performance to achieve economic growth and development. On the other hand, a high level of various risks in a country's economy, acting as destructive external shocks, can lead to capital flight and deter investors, driving transaction costs so high that the country falls into an economic recession. Consequently, the society's economic resilience is also jeopardized. In this context, the present study examines the impact of political risk, economic risk, and financial risk on Iran's economic resilience during the years 1989 to 2021. The Dynamic Ordinary Least Squares (DOLS) method was used to measure these effects. The results indicate that political risk increases economic resilience by 0.34 units. In contrast, economic risk and financial risk decrease economic resilience by 0.41 and 0.56 units, respectively. Furthermore, trade openness and human capital increase economic resilience by 0.10 and 0.32 units, respectively. Meanwhile, industrialization and government expenditures reduce economic resilience by 0.11 and 0.08 units, respectively.

Keywords

Main Subjects

References

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History

  • Receive Date: 18 February 2025
  • Revise Date: 11 March 2026
  • Accept Date: 17 April 2026

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