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An Investigation of the Role of Exchange Rates on U.S. Exports of Selected Agricultural Products: 1968-1983

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  • Childs, Nathan W.
  • Hammig, Michael D.

Abstract

An· econometric partial equilibrium trade model of the U.S. corn, wheat, soybean, cotton, and tobacco market is developed for the yearly periods 1968-1983. The effect of real exchange rates, real price, and demand factors on the exports of each commodity is examined to test the hypothesis that monetary factors can affect the agricultural sector. An examination of the elasticities of real price, real exchange rate, and real income indicate that an extremely inelastic response to both price movements and exchange rate adjustments. Foreign buying power is the strongest explanatory variable. An exchange rate linkage with the agricultural sector is not proven.

Suggested Citation

  • Childs, Nathan W. & Hammig, Michael D., 1986. "An Investigation of the Role of Exchange Rates on U.S. Exports of Selected Agricultural Products: 1968-1983," Working Papers 117656, Clemson University, Department of Agricultural and Applied Economics.
    • Handle: RePEc:ags:cuaewp:117656
    DOI: 10.22004/ag.econ.117656
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    References listed on IDEAS

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    1. Chambers, Robert G. & Just, Richard E., 1982. "An investigation of the effect of monetary factors on agriculture," Journal of Monetary Economics, Elsevier, vol. 9(2), pages 235-247.
    2. Hushak, Leroy J., 1985. "The Exchange Rate And Agriculture: Real Issue Or Dead Horse!," 1985 Annual Meeting, August 4-7, Ames, Iowa 278660, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    3. Dallas S. Batten & Michael T. Belongia, 1984. "The recent decline in agricultural exports: is the exchange rate the culprit?," Review, Federal Reserve Bank of St. Louis, vol. 66(Oct), pages 5-14.
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    5. Robert G. Chambers, 1984. "Agricultural and Financial Market Interdependence in the Short Run," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 66(1), pages 12-24.
    6. 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.
    7. Paul R. Johnson & Thomas Grennes & Marie Thursby, 1977. "Devaluation, Foreign Trade Controls, and Domestic Wheat Prices," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 59(4), pages 619-627.
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