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How Sensitive is U.S. Agricultural Trade to the Bilateral Exchange Rate?: Evidence from Bulk and Consumer-oriented Products

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  • Baek, Jungho
  • Koo, Won W.

Abstract

This paper examines the dynamic effects of changes in the bilateral exchange rate on changes in the bilateral trade of bulk and consumer-oriented agricultural products between the U.S. and its 10 major trading partners. We find that, for consumer-oriented products, U.S. exports are highly sensitive to the bilateral exchange rate and foreign income in both the short- and long-run, while U.S. imports are mostly responsive to the U.S. domestic income. For bulk products, on the other hand, U.S. exports and imports are driven largely by the income of the U.S. and its trading partners and less by exchange rate changes in both the short- and long-run.

Suggested Citation

  • Baek, Jungho & Koo, Won W., 2010. "How Sensitive is U.S. Agricultural Trade to the Bilateral Exchange Rate?: Evidence from Bulk and Consumer-oriented Products," 2010 Annual Meeting, July 25-27, 2010, Denver, Colorado 60929, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaea10:60929
    DOI: 10.22004/ag.econ.60929
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    1. Mohsen Bahmani-Oskooee & Zohre Ardalani, 2006. "Exchange Rate Sensitivity of U.S. Trade Flows: Evidence from Industry Data," Southern Economic Journal, John Wiley & Sons, vol. 72(3), pages 542-559, January.
    2. Mohsen Bahmani-Oskooee & Marzieh Bolhasani, 2008. "The J-Curve: Evidence from commodity trade between Canada and the U.S," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 32(3), pages 207-225, July.
    3. Gupta-Kapoor Anju & Ramakrishnan Uma, 1999. "Is There A J-Curve? A New Estimation for Japan," International Economic Journal, Taylor & Francis Journals, vol. 13(4), pages 71-79.
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