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The effects of macroeconomic policy on South African agriculture: implications for exports, prices and farm incomes

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  • R. F. Townsend

    (Department of Agricultural Economics, Extension and Rural Development, University of Pretoria, South Africa)

  • C. Thirtle

    (Department of Agricultural and Food Economics, University of Reading, UK)

Abstract

Cointegration techniques were used to identify valid long-run relationships between macroeconomic variables and agriculture. Then, identifying restrictions were imposed on a VAR system and three long-run equilibrium relationships were found, with exports, the real price of outputs and net farm income as the dependent variables. Some of the elasticities had perverse signs that could be explained by the activities of the Marketing Boards and other distortionary policies. Tests shows that the macroeconomic variables were causally prior to the agricultural variables and that the system was becoming more responsive later in the period, as some of the distortion was removed. © 1998 John Wiley & Sons, Ltd.

Suggested Citation

  • 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.
    • Handle: RePEc:wly:jintdv:v:10:y:1998:i:1:p:117-128
    DOI: 10.1002/(SICI)1099-1328(199801)10:1<117::AID-JID504>3.0.CO;2-J
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    References listed on IDEAS

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    1. Robert G. Chambers & Richard E. Just, 1981. "Effects of Exchange Rate Changes on U.S. Agriculture: A Dynamic Analysis," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 63(1), pages 32-46.
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    5. 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.
    6. Johansen, Soren, 1988. "Statistical analysis of cointegration vectors," Journal of Economic Dynamics and Control, Elsevier, vol. 12(2-3), pages 231-254.
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    Cited by:

    1. İbrahim Bozkurt & M. Veysel Kaya, 2021. "Agricultural production index: International comparison," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 67(6), pages 236-245.

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