An Econometric Anasyis Of Casual Relationship Between Agricultur Output And Agricultural ‎Loans In Libya For The Period (1970-2010)‎

Abstract

This paper investigates empirically the causal relationships between, agricultural output and agricultural loans in Libya by using annual time series data for the period 1970 -2010. Cointegration, Granger causality and Impulse Response Function are utilized in order to determine the long run equilibrium relationship and the direction of the causality between the variables. 

The cointegration test indicates the existence of long run equilibrium relationship between agricultural output and the agricultural loan. The results also indicate that there is unidirectional Granger-causality between the two variables running from agricultural loans to agricultural output. The findings have significant implications on Libyan economic policy as the variables have shown strong long-run relationship.

Key words: Agriculture output, agricultural loans, causality, Cointegration, Libya.