Investigating the Impact of Oil Price Fluctuations and the Intensification of Sanctions on the Value Added of the Agricultural Sector Iran’s

Document Type : Research Paper

Authors

1 Master student, Department of Agricultural Economics, Faculty of Economics and Agricultural Development, University of Tehran, Karaj, Iran

2 Assistant Professor, Department of Agricultural Economics, Faculty of Economics and Agricultural Development, University of Tehran, Karaj, Iran

3 Assistant Professor, Development and Foresight Research Center, Planning and Budget Organization, Tehran, Iran

Abstract

Oil and oil’s revenue are the most important items of economy that makes big part of government budget. over the years oil price has* been fluctuating because of factors such as political of other country, social issues and this fluctuation has impacts on development and economic growth. Considering the importance of oil in economy and its impact on various economic sectors, including agriculture which is a portent part of economy that has its effects on GDP, food security, employment and etc. This study investigated the impact of oil fluctuation price and the Intensification of Sanctions on value added of Iran's agriculture sector between 1984 and 2018. To estimate the oil price fluctuations using GARCH  model, and investigating short- run and long- run relationship between value added of agriculture and opec oil price fluctuations and the intensification of sanctions use ARDL model. The results show that in the long term, the intensification of sanctions has a positive effect on the value added of the agricultural sector and the fluctuation of OPEC oil prices has a negative effect on the value added of the agricultural sector. Therefore, paying attention to the infrastructure of the agricultural sector as a relatively stable sector of the country's economy and covering the price risk of exporting agricultural products and importing production inputs by adopting appropriate strategies in related markets and creating and developing knowledge-based companies in this field, can guarantee positive economic growth for the whole economy.

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References

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Iranian Journal of Agricultural Economics and Development Research
Volume 53, Issue 2
June 2022
Pages 553-566

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