The Estimation of Impact of Business Cycles on Total Factor Productivity of Different Economic Sectors in Iran

Productivity is one of the factors associated with the development ieads to increased production. Growth of total factor productivity, reduce production costs and increase the competitiveness power of producers in the market.since the business cycles is one of the most important macroeconoic indicators.in this paper, has tried to investiagate impact of business cycles on total factor productivity in different economic sectors (agriculture, mining, industry) using panel data methods and utilizes solow residual model, set of time series during the period 1979-2010. The result show that trade liberalization index, the cost of research and development and exchange rate have positive effect and business cycle variables, inflation rates have a negative effect on on Total Factor Productivity. So with the results of the present study, recommend greater attention to reducing inflation and expanding R & D activities in the country.