Impacts of Real Exchange Rate and its Uncertainty on Private Investment in Agricultural Sector

Authors

• H. Rafiee
• S. R. Khormizi
• R. Mahmoudgordi
• O. Zamani
• S. A. Mortazavi
• H. Naderi

Abstract

This paper aims to assess the impacts of factors affecting private investment in agriculture with emphasis on the real exchange rate and its uncertainty by using time series data for1967-2006 period. First, by using Generalized Auto-Regressive Conditional Heteroskedactisity (GARCH) model, Exchange rate uncertainty was estimated and then by using Auto-Regressive Distributed Lag (ARDL) method the variables were estimated. The results showed that real exchange rate and its uncertainty, both in the long and short run, had negative impact on investment in agriculture. In addition, findings of the study suggest that increase in agricultural credit and prices would encourage private investment in the agricultural sector
 

Keywords

• Private investment
• real exchange rate
• agriculture sector
• Iran

20.1001.1.20086407.1390.3.12.7.8

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