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The Impact of Terms of Trade Volatility on Agricultural Value Added in Iran | ||
| اقتصاد کشاورزی و توسعه | ||
| Article 3, Volume 22, Issue 4 - Serial Number 88, March 2015, Pages 41-60 PDF (259.47 K) | ||
| DOI: 10.30490/aead.2015.58943 | ||
| Authors | ||
| Esmaeil Pishbahar1; M. Ghahremanzadeh; ebrahim javdan* 2 | ||
| 1Department of Agricultural Economics, Faculty of Agriculture, University of Tabriz | ||
| 2PhD Candidate. Agricultural Economics. Tabriz University | ||
| Abstract | ||
| Abstract Terms of trade shocks have been found to be an important source of macroeconomic volatility. Therefore, this study examines the impact of terms of trade volatility on agricultural value added in Iran. For this purpose, the Auto-Regressive Conditional Heteroscedasticity (ARCH) approach is used to measure the terms of trade volatility. Autoregressive Distributed Lag (ARDL) approach is used to obtain the estimates of the co-integrating relations and the short run dynamics. Findings indicate that, the terms of trade volatility has a significant negative effect on Iran's agricultural sector value added in short and long term. The error correction term (-0.39) is suggesting an appropriate adjustment process. According to the results, it is recommended that the economy's dependence on oil income must be reducing. In addition, it is necessary that exports to be based upon the relative advantages. JEL Classification: Q10, C22, F43 Keywords: Agricultural Sector, Terms of Trade Volatility, Value Added, Iran | ||
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