Analysis of the causal relationship between the gross fixed capital formation and gross domestic product for the agricultural sector for the period 1980 -2010

Abstract

Despite Iraq's possession of the energies material, human and agricultural resources and great economic but that contribution of the agricultural sector in the total gross fixed capital formation and gross domestic product in the Iraqi economy remained low and declining continuously since the nineties of the last century, as well as the inability of agricultural production to meet the country's needs of food . The food gap increased strategic food crops until it reached 1049 thousand tons in 2010. On this basis, there is a need to study and analysis the behavior of the function of  gross fixed capital formation and its relationship with Gdp in the agricultural sector. Hence the importance of this study is to analysis the reality and trends gross fixed capital formation and domestic product in the agricultural sector for the period (1980-2010) and its rates of growth in an attempt to determine the causal relationship (Granger) between these two variables, where the results indicate a lack of stability of data series variables (Cap) and (Gdp) at the level of their stability after taking its first differences and the existence of a common integration relationship deltoid and explain the relationship between long-term variables where the causal relationship appeared (Granger) destined of Gdp to gross  fixed capital formation Cap. The result show that the compounding  rates of growth for both Cap and Gdp were negative throughout the studied period (1980 -2010) , and , also declining  the relative important  of these   variable in the Iraqi  economy especially during the period 2003 -2010 which  represent the deterioration in the infrastructure of Iraq  in agriculture sector