From Liquidity Creation to Delinquency: A Cognitive Social Pathology Analysis of Iran’s Monetary and Banking Policies

Abstract

The present article examines the relationship between monetary policies—particularly the process of liquidity creation—and their socio-behavioral consequences in the form of increased various types of delinquency in Iranian society. The primary objective of the study is to explain the socio-economic mechanisms through which disproportionate liquidity growth and inefficiencies in the banking system can intensify livelihood pressures, reduce social capital, and ultimately increase the propensity toward delinquent behaviors. The research adopts a descriptive–analytical method based on document review and theoretical analysis. Within this framework, the trends of liquidity creation in Iran’s economy and their inflationary consequences are first examined; subsequently, drawing on approaches from economic sociology and theories of social pathology, the relationship between economic variables and indicators of delinquency is explicated. The findings indicate that an increase in liquidity without productive backing, through generating chronic inflation, reducing purchasing power, and exacerbating economic inequalities, creates conditions that weaken informal social controls and heighten structural pressure on vulnerable groups. These conditions, indirectly, increase the likelihood of both minor and major forms of delinquency. Furthermore, the inefficiency of monetary policies and weak banking supervision intensify this process and contribute to the reproduction of the cycle of social harm. Ultimately, the article concludes that reforming monetary policies, controlling unproductive liquidity creation, and strengthening transparency within the banking system are not only economic imperatives but also critical strategies for preventing social harm and enhancing social security.