Analysis and Measurement of the Causal Relationship between the Exchange Rate and Agricultural Growth in Iraq for the Period 2000-2022

Document Type : Primary Research paper

Authors

Dept. of Soil Sci. and Water Res., Coll. of Agri., Uni. of Sumer, Iraq 2Plan. Prot. Dir., Min. of Agric., Iraq

Abstract

This study aims to verify the existence and direction of the relationship between the exchange rate and agricultural growth in Iraq for the period 2000-2022 using the causality developed by Toda – Yamamoto. The research found a causal relationship in one direction from agricultural growth to the exchange rate, as the value of Chi-sq was about 7.4 in the event that the exchange rate is a dependent variable, which is significant at the level of 5%, and this means that there is a one-way causal relationship between agricultural growth and the exchange rate in Iraq, and this means that the lack of agricultural production in Iraq affected the exchange rate local currency. Because the country suffers from a shortage of agricultural production, it is forced to import more agricultural products. The study recommended diversifying foreign exchange sources by promoting trade with other countries, encouraging foreign investments in the country, promoting economic growth, and improving the investment climate.

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