The Effects of Asymmetric Shocks of the Household Risk Preparation on Economic Growth from a Micro Perspective

Document Type : Research Paper

Authors

1 PhD student in International Economics, Department of Economics, Isfahan Branch (Khorasgan), Islamic Azad University

2 corresponding Author, Associate Professor of Economics, Department of Economics, Isfahan (Khorasgan) Branch, Islamic Azad University, Isfahan

3 Associate Professor of Economics, Department of Economics, Isfahan (Khorasgan) Branch, Islamic Azad University

Abstract

The household and its choices and decisions as a micro institution have a significant effect on all aspects of the macro economy. This important institution is facing risks and harmful issues, the ability to deal with them, in addition to affecting the well-being of family members, can also affect the macroeconomic situation. The aim of this article is to analyze the effect of positive and negative shocks on the household risk preparation on per capita growth in a selection of OPEC member countries during the period of 2002-2021. So ,the household risk preparation index was created by following Foa (2014) by considering four main components including household access to financial resources, social support, human capital and the economic capacity of the government with the PCA method for selected countries. Then the effect of positive and negative shocks of the mentioned index on per capita growth was estimated using the NARDL method. Findings show in each period, 50.3% of short-term imbalances have moved towards the long-term trend, so that in the long-term, shocks of the household risk preparation are asymmetric and positive (negative) shocks have a positive (negative) effect on the per capita growth of selected countries

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References

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Quarterly Journal of Applied Theories of Economics
Volume 10, Issue 2 - Serial Number 37
September 2023
Pages 97-118

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