Examining the effects of bank facilities on macroeconomic variables

Bank facilities are known as one of the most important ways of financing economic enterprises to increase production and employment; So that nearly 90% of financing in Iran is done by banks. However, the effects of bank facilities on macroeconomic variables are controversial due to the creation of liquidity or the deviation it can have from production. Therefore, the aim of this study is to investigate the effects of bank facilities on macroeconomic variables using the Autoregressive Distributed Lag (ARDL) during the period of 1978-2022. The results of the research showed that the effect of bank facilities on the variables of economic growth, non-governmental sector debt to banks, liquidity and capital stock was positive and insignificant on the government sector debt to banks. Therefore, since the main purpose of banking facilities is to increase production and employment, granting these facilities is expected to lead to favorable results in the economy. However, if there is not enough supervision on how to pay and spend it, it can increase the volume of money and liquidity (according to the research findings) and lead to economic instability.