Impact of Fiscal Policy on Growth of the Agricultural Sector Using NARDL Model | ||
| Egyptian Journal of Agricultural Research | ||
| Article 7, Volume 100, Issue 1, March 2022, Pages 68-84 PDF (988.93 K) | ||
| Document Type: Original Article | ||
| DOI: 10.21608/ejar.2022.112487.1186 | ||
| Author | ||
| Yehia Abd El-Rhaman Yehia* | ||
| Agricultural Economics Research Institute | ||
| Abstract | ||
| Egypt suffers from unstable growth rates in light of the availability of many untapped economic resources and the exacerbation of taxes to many negative economic and social effects, which is reflected in all sectors of the national economy, the most important of which is the agricultural sector. Which requires identifying the extent to which the agricultural sector is affected by public spending as one of the main fiscal policy tools?. Hence, the research aims to study the relative importance of public spending on different economic sectors, and to measure the impact of agricultural public spending on the growth of the agricultural sector using the NARDL model. The results of the study of the relative importance of public spending on economic sectors over the period (2015/16-2019/20) indicate that the electricity sector comes in the first place with a rate of about 18.5%, followed by transport and storage, and construction and building by about 13.4%, 11.7% for each of them, respectively. From a study of the relative importance of the average contribution of the economic sectors to the GDP, it was found that the transport and storage sector came in the first place with a rate of about 15.8%, followed by the wholesale and retail trade, other transformative trade, agriculture, then real estate activities, with a rate of about 13.2%, 12.1 %, 11.1%, 10.1%, respectively. Due to the existence of a co-integration relationship between the model variables, the long-term relationship between public agricultural spending and agricultural domestic product has been estimated. It may occur in spending is an important catalyst for the growth of agricultural output. Any negative shock would have a neutral effect on the real agricultural output. Hence, the research recommends paying attention to the real sources of growth, such as the productive sectors that achieve an added value through the redistribution of public spending on the most efficient productive sectors. The existence of a non-linear relationship between agricultural public spending and the growth of the agricultural sector indicates the inability of fiscal policy to match the needs of the sector, which requires adjusting fiscal policy in proportion to the asymmetric effects over time. | ||
| Keywords | ||
| Fiscal Policy; Government Expenditure; Agricultural Growth; NARDL Model | ||
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