The Impact of Renewable Energy Consumption, Trade Liberalization and Oil Prices on the Economic Growth of Iran's Agricultural Sector

Document Type : Original Article

Authors

1 Ph.D. Student of Agricultural Economic, Faculty of Agricultural Economic, Science and Research Branch, Islamic Azad University, Tehran, Iran

2 Associate Professor Department of Agricultural Economic, Faculty of Agricultural Economic, Science and Research Branch, Islamic Azad University, Tehran, Iran

10.22034/eiap.2023.170006

Abstract

Nowadays, agriculture is one of the largest economic sectors in Iran, which plays an important role in GDP and ultimately creates added value. In this study, the effect of renewable energy consumption, trade liberalization, oil prices, investment and employment on the economic growth of the agricultural sector during the years 1397-1387 was examined. In order to evaluate the long-term and short-term relationship between these variables, the Autoregressive Distributed Lag (ARDL) Model was used. The results of this model show that renewable energy consumption and employment have a positive effect on the economic growth index of Iran's agricultural sector; as expected, with a 1% increase in renewable energy consumption and employment, economic growth in the long run will increase by about 0.25 and 0.72%, respectively. In contrast, rising oil prices and trade liberalization have a negative impact on the growth of the agricultural sector. The results of short-term relationships also show that the error correction coefficient is significant and has a negative sign. Based on this result, it is expected that in each period, about 84% of the deviation of the short-term relationship from the long-term path will be adjusted. Finally, considering the high impact of renewable energy consumption on economic growth and on the other hand, considering the severe pollution caused by the consumption of fossil fuels, it is suggested that the government provides the infrastructure to replace fossil energies with renewable energies as soon as possible.
 

Keywords

Main Subjects


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