Effect of macroeconomic variables on the Iran agricultural sector income

Authors

• H. Rabiei
• M. Salarpour
• M. Sabouhi Saboni

Abstract

Now seems almost impossible, imagine an economy without the use of policy tools and intervention policy makers. So, what is important is cost reduction resulting from the policies and increasing their efficiency. Agricultural sector with other sectors in the domestic economy is dependent, and application and performance macro-economic policies by the government affects on different parts of economic activity in different ways. This study examines the short and long-run effects of changes in macroeconomic variables, including agricultural commodity prices, interest rate, exchange rate, money supply, GDP and subsidies on the Iran's agricultural sector income in a cointegration framework. For this purpose, is used from Johansen Model with annual data for 1976– 2008. Results show that there exist the long-run equilibrium relationships among selected macroeconomic variables and income agricultural sector. Interest rate and exchange rate, that could be expected Theoretically, have in the short and long-run respectively, negative and positive relationship with income agricultural sector. Also, the prices of agricultural commodities and money supply have in the long term negative effect, but in the short term positive effect on income agricultural sector. The results showed that the payment subsidy to the agricultural sector has not significant effect on income farmers
 

Keywords

• commodity price
• Exchange Rate
• interest rate
• income agricultural sector
• Johansen Cointegration

20.1001.1.20086407.1391.4.13.4.4

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