IDEAS home Printed from https://ideas.repec.org/a/ags/agreko/346826.html
   My bibliography  Save this article

Establishing the linkages between the South African agricultural trade balance and macroeconomic indicators

Author

Listed:
  • Fadeyi, O.A.
  • Ogundeji, A.A.
  • Willemse, B.J.

Abstract

This paper investigates the long-run and short-run linkages between macroeconomic fundamentals, agricultural variables and the South African agricultural trade balance, using co-integration analysis and a vector error-correction model with yearly data from 1980 to 2011. The literature review shows that these linkages have not been empirically established for South Africa, despite the relative importance thereof in the policy process. The findings reveal that in the long run, the exchange rate, agricultural price, agricultural production and disposable income all have a significant impact on trade balance. The joint short-run dynamic impact of the lagged trade balance, lagged agricultural production, lagged exchange rate, domestic price and agricultural production explains the changes in the South African agricultural trade balance.

Suggested Citation

  • Fadeyi, O.A. & Ogundeji, A.A. & Willemse, B.J., 2015. "Establishing the linkages between the South African agricultural trade balance and macroeconomic indicators," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 53(4), March.
    • Handle: RePEc:ags:agreko:346826
    DOI: 10.22004/ag.econ.346826
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/346826/files/Establishing%20the%20linkages%20between%20the%20South%20African%20agricultural%20trade%20balance%20and%20macroeconomic%20indicators.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.346826?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Dickey, David A & Fuller, Wayne A, 1981. "Likelihood Ratio Statistics for Autoregressive Time Series with a Unit Root," Econometrica, Econometric Society, vol. 49(4), pages 1057-1072, June.
    2. Orden, David, 2010. "Recent Macroeconomic Dynamics and Agriculture in Historical Perspective," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 42(3), pages 467-476, August.
    3. Houssem Eddine Chebbi, 2010. "Agriculture and economic growth in Tunisia," China Agricultural Economic Review, Emerald Group Publishing Limited, vol. 2(1), pages 63-78, February.
    4. Kwiatkowski, Denis & Phillips, Peter C. B. & Schmidt, Peter & Shin, Yongcheol, 1992. "Testing the null hypothesis of stationarity against the alternative of a unit root : How sure are we that economic time series have a unit root?," Journal of Econometrics, Elsevier, vol. 54(1-3), pages 159-178.
    5. Jungho Baek & Won W. Koo, 2008. "Identifying Macroeconomic Linkages to U.S. Agricultural Trade Balance," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 56(1), pages 63-77, March.
    6. Keith J. Collins & William H. Meyers & Maury E. Bredahl, 1980. "Multiple Exchange Rate Changes and U.S. Agricultural Commodity Prices," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 62(4), pages 656-665.
    7. G. Edward Schuh, 1974. "The Exchange Rate and U. S. Agriculture," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 56(1), pages 1-13.
    8. Asjaha, T.A. & Jooste, Andre, 2007. "The Effect of Monetary Changes on Relative Agricultural Prices," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 46(4), pages 1-15, December.
    9. Houssem Eddine Chebbi, 2010. "Agriculture and economic growth in Tunisia," China Agricultural Economic Review, Emerald Group Publishing Limited, vol. 2(1), pages 63-78, February.
    10. Johansen, Soren, 1995. "Likelihood-Based Inference in Cointegrated Vector Autoregressive Models," OUP Catalogue, Oxford University Press, number 9780198774501.
    11. Robert G. Chambers & Richard E. Just, 1979. "A Critique of Exchange Rate Treatment in Agricultural Trade Models," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 61(2), pages 249-257.
    12. J. M. Gil & M. BenKaabia & H. E. Chebbi, 2009. "Macroeconomics and agriculture in Tunisia," Applied Economics, Taylor & Francis Journals, vol. 41(1), pages 105-124.
    13. Johansen, Soren, 1992. "Cointegration in partial systems and the efficiency of single-equation analysis," Journal of Econometrics, Elsevier, vol. 52(3), pages 389-402, June.
    14. Ilhan Ozturk & Huseyin Kalyoncu, 2009. "Exchange Rate Volatility and Trade: An Empirical Investigation from Cross-country Comparison," African Development Review, African Development Bank, vol. 21(3), pages 499-513.
    15. Joseph Kargbo, 2006. "Exchange rate volatility and agricultural trade under policy reforms in South Africa," Development Southern Africa, Taylor & Francis Journals, vol. 23(1), pages 147-170.
    16. Robert G. Chambers, 1981. "Interrelationships between Monetary Instruments and Agricultural Commodity Trade," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 63(5), pages 934-941.
    17. Bordo, Michael David, 1980. "The Effects of Monetary Change on Relative Commodity Prices and the Role of Long-Term Contracts," Journal of Political Economy, University of Chicago Press, vol. 88(6), pages 1088-1109, December.
    18. Davidson, Russell & MacKinnon, James G., 1993. "Estimation and Inference in Econometrics," OUP Catalogue, Oxford University Press, number 9780195060119.
    19. Houthakker, Hendrik S & Magee, Stephen P, 1969. "Income and Price Elasticities in World Trade," The Review of Economics and Statistics, MIT Press, vol. 51(2), pages 111-125, May.
    20. Dushmanitch, V. Y. & Darroch, M. A. G., 1990. "An Economic Analysis Of The Impacts Of Monetary Policy On South African Agriculture," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 29(4), December.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. repec:ags:ijag24:346826 is not listed on IDEAS
    2. O.A. Fadeyi & A.A. Ogundeji & B.J. Willemse, 2014. "Establishing the linkages between the South African agricultural trade balance and macroeconomic indicators," Agrekon, Taylor & Francis Journals, vol. 53(4), pages 92-105, November.
    3. Houssem Eddine Chebbi & Marcelo Olarreaga, 2011. "Agricultural Trade Balance and Exchange Rate Depreciation: The Case of Tunisia," Working Papers 610, Economic Research Forum, revised 08 Jan 2011.
    4. Glauben, Thomas & Loy, Jens-Peter & Körner, Julia, 2007. "Der Einfluss der Euro-Einführung auf die Preisentwicklung bei frischen Lebensmitteln in Deutschland," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 127(3), pages 457-485.
    5. Tegene, Abebayehu, 1990. "The Impact of Macrovariables on the Farm Sector: Some Further Evidence," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 22(1), pages 77-86, July.
    6. Gomez, Miguel I. & Koerner, Julia, 2009. "Do retail coffee prices increase faster than they fall? Asymmetric price transmission in France, Germany and the United States," Working Papers 55930, Cornell University, Department of Applied Economics and Management.
    7. Devadoss, S., 1985. "The impacts of monetary policies on US agriculture," ISU General Staff Papers 198501010800008837, Iowa State University, Department of Economics.
    8. Tiwari, Aviral & Shahbaz, Muhammad, 2011. "India's trade with USA and her trade balance: An empirical analysis," MPRA Paper 29023, University Library of Munich, Germany.
    9. Dmitry Burakov, 2016. "Elasticity of Agricultural Prices in Russia: An Empirical Study of Energy and Monetary Channels," International Journal of Energy Economics and Policy, Econjournals, vol. 6(3), pages 551-562.
    10. Ardeni, Pier-Giorgio & Rausser, Gordon C., 1990. "Alternative subsidy reduction paths: the role of fiscal and monetary policy linkages," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt5074f3vq, Department of Agricultural & Resource Economics, UC Berkeley.
    11. Shane, Mathew & Roe, Terry L. & Somwaru, Agapi, 2008. "Exchange Rates, Foreign Income, and U.S. Agricultural Exports," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 37(2), pages 1-16.
    12. Chebbi, Houssem Eddine & Lachaal, Lassaad, 2007. "Agricultural Sector and Economic Growth in Tunisia: Evidence from Co-integration and Error Correction Mechanism," 103rd Seminar, April 23-25, 2007, Barcelona, Spain 9416, European Association of Agricultural Economists.
    13. Hondroyiannis, George & Papapetrou, Evangelia, 2001. "Demographic changes, labor effort and economic growth: empirical evidence from Greece," Journal of Policy Modeling, Elsevier, vol. 23(2), pages 169-188, February.
    14. Fabian Knorre & Martin Wagner & Maximilian Grupe, 2021. "Monitoring Cointegrating Polynomial Regressions: Theory and Application to the Environmental Kuznets Curves for Carbon and Sulfur Dioxide Emissions," Econometrics, MDPI, vol. 9(1), pages 1-35, March.
    15. Md. Shahiduzzaman & Khorshed Alam, 2014. "A reassessment of energy and GDP relationship: the case of Australia," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 16(2), pages 323-344, April.
    16. Neil R. Ericsson & James G. MacKinnon, 2002. "Distributions of error correction tests for cointegration," Econometrics Journal, Royal Economic Society, vol. 5(2), pages 285-318, June.
    17. Hondroyiannis, George & Lolos, Sarantis & Papapetrou, Evangelia, 2002. "Energy consumption and economic growth: assessing the evidence from Greece," Energy Economics, Elsevier, vol. 24(4), pages 319-336, July.
    18. Vicente Esteve, 2004. "Política fiscal y productividad del trabajo en la economía española: un análisis de series temporales," Revista de Analisis Economico – Economic Analysis Review, Universidad Alberto Hurtado/School of Economics and Business, vol. 19(1), pages 3-29, June.
    19. Boris Hofmann, 2003. "Bank Lending and Property Prices: Some International Evidence," Working Papers 222003, Hong Kong Institute for Monetary Research.
    20. Garg, Bhavesh & Prabheesh, K.P., 2021. "Testing the intertemporal sustainability of current account in the presence of endogenous structural breaks: Evidence from the top deficit countries," Economic Modelling, Elsevier, vol. 97(C), pages 365-379.
    21. Levent KORAP, 2008. "Exchange Rate Determination Of Tl/Us$:A Co-Integration Approach," Istanbul University Econometrics and Statistics e-Journal, Department of Econometrics, Faculty of Economics, Istanbul University, vol. 7(1), pages 24-50, May.

    More about this item

    Keywords

    Agribusiness;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:agreko:346826. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/aeasaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.