Paper Information

Journal:   EQTESAD-E KESHAVARZI VA TOWSE'E   Summer 2004 , Volume 12 , Number 2 (46); Page(s) 73 To 106.
 
Paper: 

THE ROLE OF BANKING CREDIT IN DEVELOPMENT OF JOB OPPORTUNITIES: A CASE STUDY OF IRAN"S AGRICULTURAL BANK

 
 
Author(s):  BAKHTIARI SADEGH, PASEBAN F.*
 
* Alzahra University and Member of Scientific Board of Ministry of Jihad-e Agriculture
 
Abstract: 

The main objective of economic development in each country is the optimal allocation of resources to satisfy human being needs and to increase production, employment, social welfare and so on. To reach such objectives, different economic policies are usually applied. Among these policies, monetary and credit policies are of greater importance. Many development economists consider optimal monetary policy as a key factor for a successful economic development plan. The use of banking credit either for new investment for financing the capital in use will result in an increase in production as well as in employment. Empirical evidence indicates that employment in the agricultural sector has declined over time due to the use of more capital and/or new capital-intensive technologies while there is a rise in employment of the industrial and service sectors. By considering the aforementioned facts and the lack of optimal allocation of resources in Irans agricultural sector, this paper tries to argue that there may be possibilities for an increase in job opportunities in the said sector. Using the time series 1970-2000 data and applying suitable econometric models, it was found that banking credit has a positive effect on employment in the short run while in the long run it has a positive effect on investment. Thus the paper concludes that at least in the short run, there is a possibility for an increase in the employment of the agricultural sector by applying a suitable banking credit system.

 
Keyword(s): AGRICULTURAL BANK CREDITS, AGRICULTURAL SECTOR EMPLOYMENT
 
References: 
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