www.aijsh.org Asian Research Consortium Investigation the Influencing Mechanisms & Short Term- Long Term Dynamism Impact of Iran’s Oil Revenues on Value Added in Agriculture

In recent decade, oil revenues have become the most essential resource of state revenue in Iranian economics and have affected other sectors and main economical variables either directly or indirectly. Due to the importance of agriculture in economical growth and development, increasing social welfare and meeting men's alimentary needs have undoubtedly been affected by fluctuations of petroleum price and has been prevented from appropriate development. Accordingly, the recent work studies the effects of petroleum revenues on added value of agriculture during the period 1971-2012 by using vector autoregression (VAR) and vector error-correction methods (VECM). The estimated co-integrated vector by Johansen's and Juselius's method suggests the existence of long-term equilibrium relationship among agricultural added value, petroleum revenues, capital stock of agriculture sector, agricultural exports. So that petroleum revenues have a negative effect and capital stock of agriculture sector and agricultural exports have a positive effect on agriculture added value. Error-correction model (ECM) that shows equilibrium rate toward long-term has been estimated as 1 percent with a minus sign, and indicates that