Estimation Non-Linearity Effect of Rent Seeking Opportunities on Volume of Private Sector Bank Deposits in Iranian Economy: Using Markov-Switching Model

Document Type : Research Article

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Abstract

Investment is financed through deposits of individuals in banks that hence affect on trend of investment and production in society. The various factors influence private deposits in banks. This paper investigates the non-linearity effect of rent seeking opportunities on volume of deposits in Iranian economy during the period of (1350-1389). For this purpose, The trend of Rent-Seeking opportunities have been simulated by three input variable that include exchange rate, the ratio of building added value to GDP and the size of government using Fuzzy logic in first step. Then, in the second step nonlinearity relation is evaluated between Rent-Seeking (Fuzzy Output) and Private sector bank deposits using Markov-Switching model. Experimental results showed that rent-seeking has negative impact on bank deposits in first regime and these have not relation in second and third regime. In first regime Rent-Seeking by -0/21 factor has most negative impact on Rent-Seeking. In fact, rent seeking opportunities motivate individuals that shift their deposits from formal market to informal market in order to more profits.

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