Measuring the relationship between the Gross capital stock and GDP in Agricultural sector of Iraq with Contegration fram work.

Abstract

Iraqi economy has had great human and natural agricultural resources. Yet, the relative contribution of agricultural sector in the gross national product (Gdp) and the capital stock formulation(Cap) have been very low and decreasing since 1990’s. Accordingly, there is a great need for measuring and analyzing the behavior of(Cap)  function in agricultural sector of Iraqi economy and determining the most effective economic  variables  on Cap  such as  (Gdp ) .The error correction model (ECM)was used as a dynamic suitable econometric model to analysis  the cap function.

The results show the significant effect of (Gdp) and in agricultural sector and the existence of long run equilibrium in the results show that about 59%and 30%of the disequilibrium. The (Cap) in previous period (t- 1) can be removed in the present period (t) resulting from any changing or shocks in Gdp in both nominal and real (adjusted) prices respectively. Many recommendation were mode one of which is necessity for increasing the investment expenditure in agricultural sector in Iraq.