Document Type : Research Article
Author
Academic staff of Islamic Azad University
Abstract
The Real Effective Exchange Rate (REER) is a measure that evaluates the value of a country's currency against a basket of other currencies, taking into account differences in domestic and foreign price levels or inflation. It serves as an indicator to compare the economic competitiveness of a country in international trade.The main purpose of this study is to investigate the impact of real effective exchange rate uncertainties on the amount of investment in the agricultural sector by provinces of the country, during the years 1387 to 1402. Therefore, first, currency uncertainties were calculated with the help of EGARCH(1,1) generalized autoregressive variance variance model and entered as an explanatory variable in the model, and then using panel data based on patterns with variable coefficients, with estimators Swamy's two-stage model, its impact along with other variables of the model on investment in the country's agricultural sector has been evaluated. The results of this study show that the effect of the variables of the GDP of the agricultural sector of the provinces, interest rate, bank credits on the amount of investment in the agricultural sector of the provinces was significant. Also, the uncertainty variable of real effective exchange rate has a positive and significant effect on agricultural investment in Isfahan and West Azerbaijan provinces, while it has a negative effect on agricultural investment in Semnan, Sistan and Baluchistan, Mazandaran, East Azerbaijan and Kermanshah provinces. Therefore, it is necessary that the government and economic policy makers refrain from making decisions that cause more volatility in the currency market in order to prevent capital outflow from the agricultural sector as the basis of the country's economy.The Real Effective Exchange Rate (REER) is a measure that evaluates the value of a country's currency against a basket of other currencies, taking into account differences in domestic and foreign price levels or inflation. It serves as an indicator to compare the economic competitiveness of a country in international trade.The main purpose of this study is to investigate the impact of real effective exchange rate uncertainties on the amount of investment in the agricultural sector by provinces of the country, during the years 1387 to 1402. Therefore, first, currency uncertainties were calculated with the help of EGARCH(1,1) generalized autoregressive variance variance model and entered as an explanatory variable in the model, and then using panel data based on patterns with variable coefficients, with estimators Swamy's two-stage model, its impact along with other variables of the model on investment in the country's agricultural sector has been evaluated. The results of this study show that the effect of the variables of the GDP of the agricultural sector of the provinces, interest rate, bank credits on the amount of investment in the agricultural sector of the provinces was significant. Also, the uncertainty variable of real effective exchange rate has a positive and significant effect on agricultural investment in Isfahan and West Azerbaijan provinces, while it has a negative effect on agricultural investment in Semnan, Sistan and Baluchistan, Mazandaran, East Azerbaijan and Kermanshah provinces. Therefore, it is necessary that the government and economic policy makers refrain from making decisions that cause more volatility in the currency market in order to prevent capital outflow from the agricultural sector as the basis of the country's economy.The Real Effective Exchange Rate (REER) is a measure that evaluates the value of a country's currency against a basket of other currencies, taking into account differences in domestic and foreign price levels or inflation. It serves as an indicator to compare the economic competitiveness of a country in international trade.The main purpose of this study is to investigate the impact of real effective exchange rate uncertainties on the amount of investment in the agricultural sector by provinces of the country, during the years 1387 to 1402. Therefore, first, currency uncertainties were calculated with the help of EGARCH(1,1) generalized autoregressive variance variance model and entered as an explanatory variable in the model, and then using panel data based on patterns with variable coefficients, with estimators Swamy's two-stage model, its impact along with other variables of the model on investment in the country's agricultural sector has been evaluated. The results of this study show that the effect of the variables of the GDP of the agricultural sector of the provinces, interest rate, bank credits on the amount of investment in the agricultural sector of the provinces was significant. Also, the uncertainty variable of real effective exchange rate has a positive and significant effect on agricultural investment in Isfahan and West Azerbaijan provinces, while it has a negative effect on agricultural investment in Semnan, Sistan and Baluchistan, Mazandaran, East Azerbaijan and Kermanshah provinces. Therefore, it is necessary that the government and economic policy makers refrain from making decisions that cause more volatility in the currency market in order to prevent capital outflow from the agricultural sector as the basis of the country's economy.
Keywords
- Models with variable coefficients
- Gross Domestic Product
- heteroscedasticity variance
- generalized regression model
- economic competitiveness
Main Subjects
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