Formulating Macro-econometric Model of the Agricultural Sector with Emphasis on Major Subsectors: the Approach of the Cointegration Technique

Abstract In this Article, Formulating macro-econometric model for Iran's agriculture sector has been considered with emphasis on its subsectors. In this regard, economic sectors is dividend including agriculture, oil and other sectors, and four subgroups agricultural sector has been considered including agriculture, animal husbandry and hunting, forestry and fisheries. Equations related to the supply and demand side of agriculture sector were specificated by goods and services, money, labor, foreign exchange markets in the form of equation 68 (58 behavioral equations and 10 equality) and estimated by cointegration technique in tow position, dynamic an static, using data during years 1981 to 2008. Results indicate that there is a long-term relationships between model variables and coefficients are statistically significant and consistent with theoretical expectations. Validation of estimated model has been investigated using a dynamic simulation as within the sample during period 1981-1999. The results of the Tile index calculation for some variables show that the model has been simulated the trends of endogenous variables close to the actual movement in the whole period. According to findings, exchange policies via increasing the nominal exchange rate led to increase the agricultural export in first years and decrease in last years.