The effect of economic shocks on agriculture macroeconomic variables using dynamic stochastic general equilibrium model

The aim of this study was to develop a multi sector dynamic stochastic general equilibrium (Large DSGE) model of the economy. In this model economy is divided into three sectors: agriculture, non-agriculture and oil. In addition, imports and exports are in the model (open economy). To implement the model of economic conditions, stickiness prices in agriculture and non-agricultural entered. Then, three shocks including: increasing productivity in agriculture sector, rising oil prices and monetary policy on the agricultural sector were examined. To calculate the required coefficients, data of the period 1971-2012 are gathered and was used Bayesian method for estimation. in sum,the results show that productivity shocks more positive effect on macroeconomic variables of the agricultural sector. Because this shocks will increase production, exports, consumption and investment in agriculture sectore and will also reduce inflation and imports.