Estimating Financial Stress in Iran's Economy: Emphasizing Its Consequences for Managing Business and Family Assets

Financial markets reduce the level of savings, capital accumulation, and economic growth by reducing transaction costs and information asymmetries in the economy. Although the growth of efficient financial markets plays a decisive role in economic growth, it should be noted that the occurrence of a crisis in financial markets, in turn, can lead to financial tensions and, in some cases, economic recession. The purpose of this article is to estimate the financial stress index in the asset and financing markets in the Iranian economy from 2001 to 2017. To calculate the financial stress index, five main financial sectors of the country were selected, including the monetary and banking sector, currency, stocks, real estate, and the credit market. Using the main components technique (PCA) technique, the variables related to stress in the components of the country's financial system have been aggregated and the proposed financial stress index for Iran's economy has been extracted. The results of the study indicate the effective role of stress in the credit market in financial stress in the Iranian economy.