Assessing macroeconomic shocks, bank stability and the housing market in the Iranian economy with the FAVAR approach

Monetary and credit policies, however, are widely accepted by economists and policymakers as a means of stabilizing the real sector of the economy and achieving sustainable economic growth. However, macroeconomic shocks, in turn, affect the stability of the banking system and real sectors of the economy, including the housing market. Therefore, the study of the impact of macroeconomic shocks on the stability of the banking system and the housing market, requires evaluation and analysis of these channels in the mechanism of shock transmission. Therefore, the present article evaluates the impact of macroeconomic shocks in Iran on banking stability and the housing market with the FAVAR approach during the period 1991-1400. The results show that, in terms of the period of impact, the capital market channel and exchange rate with a deviation of limits and the capital market channel with 0.4. Percentage deviation from the mean of the minimum and maximum effect, respectively, and in terms of the duration of the effect, the housing channel and the banking channel act almost similarly.