Survey of World Trade Organization Membership Effects on Agricultural Sector in Iran (By Time Series)

Despite the benefits of world trade organization (WTO) membership on the economy, it may also have undesirable effects. So the countries that have done sufficient studies about effects of WTO membership on their economies before entering WTO, can change its threats into opportunity and use its advantages. Therefore we have tried to study the effects of WTO membership on a small part of the Iran economy. To this aim an economic model was designed and has been estimated. This model consists of agriculture sector inflation as dependent variable and liquidity or bank credits to agriculture sector, agriculture sector GDP, globalization or integration index, and weighted average of input prices in agriculture sector as independent variables. In order to study and analyze the relationship among variables, we used Microfit software and Johansen co-integration method with annual time series data of 1981-2013. Our results of "Johanson-Juselius" approach confirmed long term co-integration relation among the variables of the model, so the existence of two co-integrated vectors is confirmed. Also in order to study structural break and the stability of estimated coefficients of model we used "accumulation sum of recursive residuals" test, the results of this test showed the stability of estimated coefficients. Finally by estimation variance decomposition, it was cleared that trade liberalization index has positive effect on dependent variable of the model.