Uncertainty in The exports of Non-Oil products and The Private Investment in Iran

Subject Areas : Applied Economics

لیلا  احمدی ¹ (ندارد)

Received: 2011-01-15 Accepted : 2011-08-28 Published : 2011-06-22

Keywords: Uncertainty, Non-oil exports, Investment of private sector, Vector error correction model ,

Abstract :

The purpose of this research is to study the impact of the level of Uncertainty in the exports of Non-Oil products on the investment of private sector in Iran during 1959-2007. To measure the degree of uncertainty in non-oil production, a Generalized Auto Regressive Conditional Heteroscedaticity Model (GARCH (1, 2)) is used. The explanatory variables of this model are: the rate of inflation, Gross domestic product and imports. In this model, optimal lag and long-term relations are identified and the vector error correction model (VECM) is estimated. The results of our study indicate that both the uncertainty in the non-oil exports and the rate of inflation have a negative effects on the private domestic investment in long run, while GDP and imports are positively related to investment.