How Do Agricultural Subsectors Respond to Productivity Shocks? Evidence from a Bayesian DSGE Model in Iran

Mahdi Khosravi (), Hossein Mehrabi Boshrabadi (), Azam Ahmadyan () and Seyyed Abdolmajid Jalaei ()
Additional contact information
Mahdi Khosravi: Department of Agricultural Economics, Faculty of Agriculture, Shahid Bahonar University of Kerman
Hossein Mehrabi Boshrabadi : Department of Agricultural Economics, Faculty of Agriculture, Shahid Bahonar University of Kerman
Azam Ahmadyan: Monetary and Banking Research Institute
Seyyed Abdolmajid Jalaei: Department of Economics, Faculty of Management, Shahid Bahonar University of Kerman

Journal of Money and Economy, 2016, vol. 11, issue 3, 305-330

Abstract: Understanding the dynamics of productivity shocks is instrumental if we are to identify the sources of economic growth. This paper, investigates dynamic effects of positives productivity shocks to agricultural subsectors during the period from 1991-2015, by disaggregating agricultural sector in Iran into four key subsectors (crops, livestock, fishing and forestry) through an estimated DSGE model. Our Bayesian estimation results suggest that positive productivity shocks lead to an increase in output, consumption, capital, employment and real wages and a fall in marginal costs and price indexes in all four subsectors. Comparing the results across the subsectors shows that following the shocks, generally, crops and livestock have the strongest reactions and forestry has the weakest ones. Additionally, among the variables, output indicates the highest responses to the shocks. Variance decomposition analysis reveals that agricultural fluctuations are mainly explained by productivity, monetary, preference and government spending shocks.

Keywords: Agricultural Subsectors; Bayesian Estimation; DSGE Model; Productivity Shocks (search for similar items in EconPapers)
JEL-codes: C69 N5 (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://jme.mbri.ac.ir/article-1-226-en.pdf (application/pdf)
http://jme.mbri.ac.ir/article-1-226-en.html (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:mbr:jmonec:v:11:y:2016:i:3:p:305-330

Access Statistics for this article

More articles in Journal of Money and Economy from Monetary and Banking Research Institute, Central Bank of the Islamic Republic of Iran Contact information at EDIRC.
Bibliographic data for series maintained by M. E. ().