Measuring the Effect of Some Macroeconomic Variables on Egyptian Agricultural Sector Using ARDL Method

In the last decade, the Egyptian economy has been subjected to several shocks resulting from the completion of the economic reform program. This has had different effects on the various economic sectors. This paper aims to measure the effect of some macroeconomic variables on agricultural productivity, and the (Autoregressive Distributed Lag, ARDL) method was used. The Macroeconomic dependent variable represents the ratio of the value added of the agricultural sector to GDP, and the independent variables are the contribution of agricultural investments to total investments. The macroeconomic variables include six independent variables: The contribution of agricultural investments to total investments, the contribution of agricultural labor to aggregate employment, lending interest rate, the ratio of money supply (M2) to GDP, net exports, and the total unemployment rate. The work starts with testing the existence of the cointegration relationship within the model using F-Bounds Test, then determining the type of this relationship, and the final stage is to measure the speed of Error Corrections in the long run. The result of the estimation was to obtain an ARDL model (1, 0, 0, 2, 3, 1, 0), and the model diagnosed and it was confirmed that there is no serial correlation or heteroscedasticity problem in the residuals, and by using the F-Bounds test, it is found that there is a long run cointegration relationship with the estimated model, and this relationship is sensible, equilibrated, standard and not degraded. As for the signs of estimated parameters, they were negative for each of the investments and estimated by about (1.03), employment about (3.26), and financial development about (0.80), but the signs were positive for the lagged dependent variable and estimated by about 0.40, the interest rate about 0.09, net exports about 0.000002, unemployment rate by about 0.07, the coefficient of determination was estimated by 0.99, and the F-value was estimated by 553.8, with high significance.