عنوان مقاله [English]
Terms of trade shocks have been found to be an important source of macroeconomic volatility. Therefore, this study examines the impact of terms of trade volatility on agricultural value added in Iran. For this purpose, the Auto-Regressive Conditional Heteroscedasticity (ARCH) approach is used to measure the terms of trade volatility. Autoregressive Distributed Lag (ARDL) approach is used to obtain the estimates of the co-integrating relations and the short run dynamics. Findings indicate that, the terms of trade volatility has a significant negative effect on Iran's agricultural sector value added in short and long term. The error correction term (-0.39) is suggesting an appropriate adjustment process. According to the results, it is recommended that the economy's dependence on oil income must be reducing. In addition, it is necessary that exports to be based upon the relative advantages.
JEL Classification: Q10, C22, F43
Keywords: Agricultural Sector, Terms of Trade Volatility, Value Added, Iran