The Effect of Economic Policies on Agricultural and Industrial Exports of Iran

International trade expansion and export development have been the center of attention by the economists, policy makers and the cornerstone of planning in many countries of the world. Agricultural and industrial sectors are the crucial economic sectors in every country that have a parity role in preparing food for people and industrial inputs. This article using vector error correction models considers the simultaneous effect of economic policies on agricultural and industrial exports during the years 1971 to 2005. After testing the stationery, Johansen test was used for long run estimation. Results have shown that monetary policy has positive and significant effect on industrial and agricultural exports in short run, while interest rate and government expenditures have significant inverse and direct effect on industrial and agricultural exports respectively, and exchange rate policy has the same effect on industrial and agricultural export in long-run. Finally, the strength of each variable was investigated on export. It is recommended that increasing non oil export, the real value of interest rate is determined and by rising volume of money and then investing it and improving commodity supply, inflation will decrease and therefore non oil export will increase.