Investigating the Common Stochastic Trend among the Value Added of Agriculture, Manufacturing, Services and Mining Sectors in Iran

Document Type : Scientific paper

Authors

1 Professor of Economic,s, Faculty of Economics, Urmia University, Urmia, Iran

2 PhD student of Economics, Faculty of Economics, Urmia University, Urmia, Iran

Abstract

The main purpose of this paper is to study the correlation and interaction between the values added of the agricultural sector, production, mining and services in Iran, as well as the analysis of the common stochastic trends among them during the period 1959-2015. Johansen and Yusilius (1992) and Gonzalo and Granger's approach (1995) were used to achieving this goal. The results show the existence of a cointegration relationship and three common stochastic trends between the growth of the studied sections, which reflects the complete absence of long-term integration between these groups of variables. The results of the analysis of common stochastic trends also indicate that during the examined period, the value-added of different sectors shows a strong reaction to the trends mentioned. Finally, given the weak convergence between the values added of different sectors, the government can achieve economic development by simultaneously investing in different sectors (Balanced on the Growth Theory).

Keywords


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