Impact of Inflation Uncertainty on Growth of Agricultural Commodities’ Production

One of the major economic problems facing most countries is inflation. But, regardless of destructive impacts of inflation on economy, inflation uncertainty also affects irreversibly the growth of agricultural commodities’ production. Using Generalized Autoregressive Conditional Heteroscedasticity (GARCH), this study deals with the correlation between inflation and its uncertainty and the effect of inflation uncertainty on agricultural commodities’ production by means of annual data gathered between 1961-2010. The results suggest that there is a unilateral, positive correlation between inflation and its uncertainty, and inflation uncertainty impacts negatively on the growth of agricultural commodities’ production.