The Effect of Financial and Tax Policies on Agricultural Trade in Iran (in Persian)

Ali Dehgan Harati (), Hossien Mehrabi Boshrabadi () and Alireza Rahbar Dehghan ()
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Ali Dehgan Harati: M.A. Student of Agricultural Economic, Shahid Bahonar University, Kerman, Iran.
Hossien Mehrabi Boshrabadi: Associate Professor, Shahid Bahonar University, Kerman, Iran.
Alireza Rahbar Dehghan: M.A. in Agricultural Economic, Sistan & Baluchestan University, Iran.

The Journal of Planning and Budgeting (٠صلنامه برنامه ریزی و بودجه), 2014, vol. 19, issue 1, 111-128

Abstract: Economic policies refer to certain government interventions in economy which aims to achieve certain socio-economic targets and to lead the economic sphere from status quo to ideal status. Financial policies are of the most effective economic policies that influence the government financial system and its corresponding macroeconomic variables, both from the revenues and expenditures point of view. Owing to the prominent role of agriculture in the economy of Iran, implementing the respective financial policies would be influential on agricultural production as well as its export and import. Accordingly, this paper attempts to survey the effect of government financial policies on agricultural trade during 1971-2009. For this purpose, the relationship among government expenditure, tax index and agricultural products trade were estimated using econometric models in the short runs and the long runs. The results indicated government expenditure and tax index had positive effect on the value of agricultural products import and export in the short run. Yet, in the long run, only the government expenditure exerted positive impact on the agricultural products import-export value, but the effect of tax index was negative. Consequently, the reformation of the tax system is advised through reducing the rates of tax on investment, to further investment and production as well as to promote employment in agricultural sector.

Keywords: Financial Policy; Tax Index; Agricultural Trade; Agricultural Imports; Vector Auto-Regression (search for similar items in EconPapers)
Date: 2014
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