Studying the Effect of Business Cycle on Production, Employment, and Investment in Agricultural Sector of Iran

Document Type : Scientific paper

Authors

1 Ms.c. student, Shahid Bahonar University,Kerman, Iran

2 َAssistant Professor, Ag. Econ. Dept. faculty of Agriculture, Shahid Bahonar University of Kerman, Kerman, Iran

3 Professor at Econ. Dept.Faculty of Agr. & Eco., Shahid Bahonar University of Kerman, Kerman, Iran

Abstract

Business cycle literature is focused on the role of variables such as oil and gas incomes, export fluctuations of oil and gas, budget deficit of the government and liquidity on the business cycle. So far, few studies have been done about the impact of business cycles on agricultural sector. Therefore, in this paper, the long-run business cycles components and irregular shocks have been extracted from real GDP and the effect of business cycle on production, employment and investment in agricultural sector of Iran has been studied. Real GDP over the period of 1973 to 2013 were separated using Hodric-Presscott filter and then the cyclical properties of key variables affecting business cycles were calculated and analyzed. The simultaneous equations method is used to evaluate the impact of business cycles on production, employment and investment in agricultural sector. Results showed that business cycles have had a significant and positive effect on agricultural value added, and   negative effect on employment and investment in agricultural sector. Therefore, it is recommended that in the years of economic prosperity the government should pay more attention to investment in agriculture, so that the economic sector would be a better helping to reduce the price of oil and gas, which is the main cause of economic recession in the country.

Keywords

References

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Macroeconomics Research Letter
Volume 12, Issue 24
December 2018
Pages 73-94

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History

  • Receive Date: 01 January 1970
  • Accept Date: 01 January 1970

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