The Physical Commodities, Economic Cycle, and Financial Stability: The transmission mechanisms in oil-exporting countries.

الملخص

This study tries to investigate how physical commodity prices (oil and gold) affect bank stability and how these prices interact with interest rates, exchange rates, economic growth, and inflation, with an emphasis on the transmission mechanisms of price impact in 17 oil-exporting countries over the period 1996–2016, using Panel Co-integration, the PMG estimator and Panel Causality tests. Our findings show that oil price, GDP, and the interest rate positively affect the long run, while gold price, inflation, and exchange rate negatively affect it, significantly tightening the interest rate's role in financial stability. However, only the exchange rate and gold price have a positive and significant effect on financial stability in the short run. Furthermore, the Causality findings confirm that Financial Stability has Bidirectional transmission channels with physical commodities and economic cycles. Physical commodities and economic cycles also drive each other through oil prices and the exchange rate.