The effect of banking crisis on poverty by using Discrete Threshold Regression Model: A case study of Iran's economy

 The purpose of this article is to investigate the impact of the financial market crisis on the phenomenon of poverty.

Due to the bank-centric nature of Iran's financial market, the effect of banking crises has been investigated as one of the shocks affecting the phenomenon of poverty.In the existing

literature, the channels of impact of banking crises on poverty are: labor market, product market, asset market and credit market. These effects were estimated using seasonal data, bank instability index as a crisis index, census poverty ratio and variables of the aforementioned channels, in the framework of a threshold-discrete regression model for the time period of 1383-1400. The results showed: labor market, product market and prices are the channels of impact of banking crises on poverty. In periods of banking crisis, the impact of product growth, unemployment rate and inflation on poverty is intensified.

Based on the results of this study the government's support policies for low-income groups through targeted planning and policies related to production support in order to increase the resistance of the labor market against the financial crisis, prevent the spread of the poverty rate with greater intensity. Considering the strong role of the labor market and economic growth on the poverty rate during the banking crisis, any type of policy that improves the business environment and production support is recommended to prevent the spread of poverty.