The Macroeconomics Factors Affecting On Iranian Agricultural Trade Balance
Non-oil exports is one of the most important issues in Iranian economy and government tries to diminish dependency of public budget on oil revenue. In this regard agriculture plays a vital role and its exports earnings is considered as a core political variable. In this paper, the short -and long-run effects of macroeconomic on agricultural trade balance has been investigated, applying the ARDL approach during 1960 to 2016.The results indicate that the domestic real income has the highest effect on the agricultural trade balance relative to other indicators both in the short-and long-run period. On the other hand, domestic money supply and foreign real income has the lowest effect in long-run and short-run respectively. In addition, real exchange rate has the positive impact on trade balance indicating that the depreciation will improve trade balance. One of the main factors that worsen the trade balance, both in short-and long-run period is real domestic income. This suggest a number of policies needed to increase domestic income, in order to increase purchasing power of people which would be directed to domestic goods rather than foreign goods.
Keywords - Iran, Agricultural Trade, Export, Domestic Goods.