Markov switching

Although gold is no longer a central cornerstone of the international monetary and financial system, it still attracts considerable attention from researchers and investors. Nowadays, many investors manage their risk with valuable assets such as gold. This paper examines the dynamic relationships between gold and stock markets in the Tehran Stock Exchange. We have applied the Markov switching method to study the role of gold as a hedge or safe haven for the Tehran Stock Exchange risk from 1998 to 2018. The high dependence and low dependence regimes used in the Markov switching model are based on empirical results that show two regimes for all markets under investigation: a low volatility regime and a high volatility regime. The study's findings show that gold can act as a strong hedge and cannot act as a safe haven for risk of The Tehran stock exchange.

The financial sector plays a central role in economic development and growth, and due to playing an intermediary role in allocating resources to all sectors of the economy, by reducing financing costs and encouraging savings and their efficient use, a major contribution. In the long-term economic growth of the government in oil-exporting countries, relying on oil revenues, it is possible to enter the financial markets extensively and make various changes in it. The main goal of policymakers from such changes is to stimulate economic growth. But studies in this area show that fiscal development does not necessarily lead to economic growth. However, in recent decades, the role of financial development in economic growth has been forgotten. Therefore, this study examines the impact of the development of financial institutions on economic growth. The statistical population of the present study consists of MENA member countries in the period 1980 to 2019. In order to conduct this research, due to the nonlinear relationship between the research variables, the PSTR model and Markov switching time series pattern have been used. Financial depth, accessibility and efficiency are also variables in the development of financial institutions that have been considered in this study. The results indicate that all three components of the financial institutions development index have a significant effect on the economic growth variable.