What Role for The Agricultural Sector in the Process Of Economic Growth of Tunisia? Evidence from Multivariate Cointegration

Houssem Eddine Chebbi and Lassaad Lachaal

No 331513, Conference papers from Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project

Abstract: For the past two decades, Tunisia has been undertaken important structural reforms, which call in most cases for market and trade liberalization (agricultural structural adjustment program, GATT reforms, free trade area with the European Union). The private-led type of growth strategy with less government intervention has culminated these last years into a more rapid economic growth and openness. Within this context, this paper examines the agricultural sector role into the economic development process and its interactions with the other sectors using time-series cointegration techniques. We use annual data from 1961 to 2005 to estimate a VAR model that includes GDP indices of five sectors in Tunisian economy. Empirical results from this study indicate that in the long-run all economic sectors tend to move together (cointegrate). But, in the short-run, the agricultural sector seems to have a limited role as a driving force for the growth of the other sectors of the economy. In addition, growth of the agricultural output may not be conducive directly to non-agricultural economic sector in the short-run. This may be the results of previous economic policies that were biased against agriculture.

Keywords: Agricultural and Food Policy; International Development (search for similar items in EconPapers)
Pages: 12
Date: 2006
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Persistent link: https://EconPapers.repec.org/RePEc:ags:pugtwp:331513

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