Document Type : Research Paper
Authors
Assistant Professor, Faculty of Economics, University of Isfahan
Abstract
The main idea of this study is examination of the Impact of Terms of Trade on
Investment by Johnsen-Juselius cointegration technique for Economy of Iran in
(1971-2006). For this aim, we specify investment function according the present
value criteria and neoclassic theory. Our model includes gross domestic production,
price index, interest rate and terms of trade.
We use Johnsen-Juselius cointegration technique for estimation of this model.
The result of econometric estimation has indicated a long run relationship among
investment, gross domestic production, price index, interest rate and terms of trade.
Our result showed GDP, price index and terms of trade have direct effect and
interest rate has inverse effect on investment.
Keywords
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