The Effects of Foreign Trade on Poverty Indicators in Iran

Authors

• L. Pirhayati
• H. Raghfar
• M.H. Fetros

Abstract

Foreign trade is an important topic in the economy of each country. There are many discussions whether the poor in developing countries take advantages of trade benefits as one of the openness dimensions. This empirical study examines this issue in Iran using Johansen Co integration test and vector error correction (VECM) test. Computing was made using Eviews software. Data required for this study were collected in the form of time series and from the central bank, Statistical Center of Iran Customs Administration, Institute of Agricultural Economics and other related organizations. The data are related to the period 1386-1363. Results of econometrics model estimate for Iran economic data show that there is a positive relationship between trade and poverty. Thus, increased trade during this period increased poverty. In other words, trade has worsened poor's living condition. Also, the review of other economic sectors, effect on poverty led to this result that the impact of agriculture on poverty is more than the other sectors. Also, the impact of this sector on poverty is almost four times in comparison to trade sector. Therefore, the results imply the importance of trade reforms combination with agricultural reforms along with sound social support policies.
 

Keywords

• Foreign
• Poverty
• Gross Domestic Product
• Agricultural Production Costs

20.1001.1.20086407.1388.1.4.1.2

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