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Money and Agriculture: The Dynamics of Money Financial Market-Agricultural Trade Linkages

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  • Orden, David

Abstract

This article investigates empirical relationships among the money supply, the interest rate, the exchange rate, the general price level, and agricultural exports and relative prices using three-and six-variable vector autoregressive models. Shocks to the money supply have little direct effect on agriculture, whereas positive interest rate, exchange rate, and general-price-level shocks have negative effects. The dynamic patterns characterizing monetary interactions with the financial variables do not preclude the possibility that monetary policies underlie the observed, interest rate and exchange rate Impacts, but the observed price-level shocks appear to be Independent ,of the money supply Agricultural exports and prices demonstrate little Impact on the macroeconomic variables.

Suggested Citation

  • Orden, David, 1986. "Money and Agriculture: The Dynamics of Money Financial Market-Agricultural Trade Linkages," Journal of Agricultural Economics Research, United States Department of Agriculture, Economic Research Service, vol. 38(3), pages 1-15.
    • Handle: RePEc:ags:uersja:149342
    DOI: 10.22004/ag.econ.149342
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    Cited by:

    1. 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.
    2. Shahnoushi, Naser & Henneberry, Shida Rastegari & Manssori, Hooman, 2009. "An Examination of the Relationship between Food Prices and Government Monetary Policies in Iran," 2009 Annual Meeting, January 31-February 3, 2009, Atlanta, Georgia 46078, Southern Agricultural Economics Association.
    3. Meyer, Stefan & Yu, Xiaohua, 2011. "Long-run neutrality of money supply for food prices in Germany with policy effects," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114640, European Association of Agricultural Economists.
    4. Evans Olaniyi, 2017. "Back to the Land: The Impact of Financial Inclusion on Agriculture in Nigeria," Iranian Economic Review (IER), Faculty of Economics,University of Tehran.Tehran,Iran, vol. 21(4), pages 885-903, Autumn.
    5. Michael T. Belongia, 1991. "Monetary policy and the farm/nonfarm price ratio: a comparison of effects," Review, Federal Reserve Bank of St. Louis, issue Jul, pages 30-46.
    6. Neibergs, J. Shannon, 1998. "Macroeconomic Conditions And Agribusiness Profitability: An Analysis Using Pooled Data," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 1(1), pages 1-15.
    7. Alogoskoufis, George & Varangis, Panos, 1992. "OECD fiscal policies and the relative prices of primary commodities," Policy Research Working Paper Series 955, The World Bank.
    8. Ardeni, Pier-Giorgio & Rausser, Gordon C., 1992. "Interactions among money, exchange rates, and commodity prices," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt8bg30713, Department of Agricultural & Resource Economics, UC Berkeley.
    9. 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.
    10. Babula, Ronald A. & Bessler, David A., 1989. "The Dynamics of Farm and Non-Farm Price Transmissions: The Case of Cotton," WAEA/ WFEA Conference Archive (1929-1995) 244855, Western Agricultural Economics Association.
    11. R. F. Townsend & C. Thirtle, 1998. "The effects of macroeconomic policy on South African agriculture: implications for exports, prices and farm incomes," Journal of International Development, John Wiley & Sons, Ltd., vol. 10(1), pages 117-128.
    12. Veeman, Michele M. & Veeman, Terrence S. & Dong, X.Y. & Sivasangaram, M., 1989. "Macro-Economic Influences on Alberta Agriculture," Project Report Series 232073, University of Alberta, Department of Resource Economics and Environmental Sociology.
    13. Veeman, Michele M. & Veeman, Terrence S. & Sivasangaram, M. & Dong, X.Y., 1989. "Macro-Economic Influences On Alberta Farmland Values," Project Report Series 232072, University of Alberta, Department of Resource Economics and Environmental Sociology.
    14. Tan, Ying & Sha, Wenbiao & Paudel, Krishna, 2017. "The Impact of Monetary Policy on Agricultural Price Index in China: A FAVAR Approach," 2017 Annual Meeting, February 4-7, 2017, Mobile, Alabama 252676, Southern Agricultural Economics Association.
    15. Liu, Donald J. & Chung, Pin J. & Meyers, William H., 1993. "The Impact Of Domestic And Foreign Macroeconomic Variables On U.S. Meat Exports," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 22(2), pages 1-12, October.
    16. Wang, Vey & Lai, Chung-Hui & Hu, Shih-Wen & Cheng, Chia-Hui, 2007. "股票政策宣告對農產品價格與股票價格的動態影響 [The impact of stock market policy announcement on commodity prices and share prices]," MPRA Paper 31178, University Library of Munich, Germany.

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