The Moderating Role Of Government Size In The Impact Of Economic Policy Uncertainty On The Stock Market Using The Fourier Bootstrap ARDL Method.
Quarterly Journal of Securities Exchange

Quarterly Journal of Securities Exchange

The Moderating Role Of Government Size In The Impact Of Economic Policy Uncertainty On The Stock Market Using The Fourier Bootstrap ARDL Method.

Document Type : Original Article

Authors
ALI moridian 1
Abbas Azadi 2
1 Lecturer, Department of Economics, Faculty of Literature and Humanities, University Ilam, Ilam, Iran. (alimoridian@ymail.com)
2 Assistant Professo, Department of Economics, Faculty of Literature and Humanities, University Ilam, Ilam, Iran. A.azadi@ilam.ac.ir
10.22034/jse.2025.12628.2397
Abstract
Stock Price, Reflects The Future Prospect And Financial Health Of Companies And Is Considered One Of The Most Important Indicators In Investment Decisions. This Index Is Strongly Affected By Economic Uncertainties That May Arise From Fluctuations In Production, Employment, Interest Rates, Oil Price, And Exchange Rate. Government Economic Policies Can Also Affect The Increase In Economic Uncertainty Through Incorrect Decision-Making And Mismanagement. In This Study, The Effect Of Economic Policy Uncertainty (Epu) On The Iranian Stock Market During The Period 1991-2023 Has Been Investigated. In Order To Accurately Assess This Relationship, The Fourier Bootstrap Ardl And Fourier Adl Methods Have Been Used. Also, This Study Examines The Moderating Role Of Government Size In The Effect Of Economic Policy Uncertainty On Stock Returns. The Research Findings Show That Economic Policy Uncertainty Has A Negative And Significant Effect On The Stock Price Index. However, Government Expenditure Can Act As A Moderating Factor To Reduce This Negative Effect. The Results Show That Increasing Government Size Increases The Sensitivity Of The Stock Market To Policy Uncertainty. In Addition, Other Macroeconomic Variables Such As Exchange Rate, Oil Price, And Inflation Also Have A Significant Impact On The Stock Market. According To The Results Of This Study, Reducing Uncertainty By Making Economic Policies More Transparent And More Predictable Can Increase Investor Confidence And Market Stability. Also, Policy Makers Should Direct Government Spending Towards Infrastructure And Production Projects To Reduce The Negative Effects Of Uncertainty And Ensure Sustainable Economic Growth.
Keywords
: Economic Policy Uncertainty
Stock Market
Government Size
Fourier Bootstrap Ardl Method
Fourier Adl Method
Subjects
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Quarterly Journal of Securities Exchange
Volume 19, Issue 74
Summer 2026
Pages 69-102