Volume 5, Issue 1 (Feb 2020)                   JNFS 2020, 5(1): 85-92 | Back to browse issues page


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Eslami M R, Baghestany A A. Modeling the Impact of Inflation Uncertainty on Food Sector Growth. JNFS. 2020; 5 (1) :85-92
URL: http://jnfs.ssu.ac.ir/article-1-204-en.html
Agricultural Planning, Economic and Rural Development Research Institute. Tehran, Iran.
Abstract:   (694 Views)
Background: One of the most fundamental objectives of the macroeconomic policies is to realize the relationship between economic growth and inflation. According to some monetary policy advisors, inflation reflects erosion in consumer’s purchasing power. Inflation as an important economic variable, affect the economic growth and its impact on economic growth has been proposed in various theories. Agriculture plays an important role in providing the food security in Iran. Methods: A Bivariate GARCH model was employed to investigate the relationship between inflation uncertainty and agricultural growth. Results: The Augmented Dickey Fuller and Phillips Perron tests indicated all variables were stationary. Estimated models were utilized to generate the conditional variances of inflation and agriculture growth as proxies of inflation and growth variability. During the entire period 1990-2012, Bivariate Granger Causality test indicated that inflation uncertainty was the cause of growth in agriculture. This finding was in line with the hypothesis presented by (Logue and Sweeney, 1981). Conclusion: Due to the causality relation of inflation uncertainty and growth in agriculture, macro policy decision-makers are recommended to consider the price policies for improving agricultural production.
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Type of article: review article | Subject: public specific
Received: 2018/08/28 | Accepted: 2019/02/17 | Published: 2020/02/1 | ePublished: 2020/02/1

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