The Effect Of Terms Of Trade and its Uncertainty On The Industrial Sector's Value Added In Iran

One of the main features of the more of developing countries is high volatility in the economic environment. Since volatility in terms of trade considered by many economists as an important factor in the economic environment's volatility in above mentioned countries. this study has been conducted to assess the effect of terms of trade and its Uncertainty on industry sector's value added in Iran by using time series data (1352-1391). For this purpose, the uncertainty of the term of trade has been measured by EGARCH model; and to estimate relationships between variables in model, ARDL approach was used. Results revealed that in the long term, the uncertainty of term of trade has negative and significant effect on the value added of the industrial sector. Logarithm of terms of trade, labor force and capital accumulation also have a significant positive effect on the value added of the industrial sector, but international trade integration index has no effect on value added in the long run.