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Shortrun Effects Of U.S. Macroeconomic Policies On U.S. Grain Exports

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  • Denbaly, Mark

Abstract

Treating exchange rates as the only exogenous U.S.- macroeconomic variable, many studies are able to unambiguously predict the effects of changes in the value of the dollar on the volume, price, and share of U.S. grain exports and government program expenses. Using the neo-Keynesian paradigm, this study develops a theoretical framework to assess the overall impact of changes in U.S. macroeconomic policy on the same variables via real income, interest and exchange rates, and the general price level. The analysis demonstrates that the shortrun impacts cannot be always unambiguously predicted. The direction of the impacts are shown to be crucially dependent on (1) the initial equilibrium point, (2) the extent of the linkage variable responses, and (3) relative magnitudes of price and real income elasticities of domestic demand, the real interest elasticity of domestic supply, and the price elasticity of export demand curves.

Suggested Citation

  • Denbaly, Mark, 1988. "Shortrun Effects Of U.S. Macroeconomic Policies On U.S. Grain Exports," Staff Reports 278148, United States Department of Agriculture, Economic Research Service.
    • Handle: RePEc:ags:uerssr:278148
    DOI: 10.22004/ag.econ.278148
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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. Kelly M. Harrison, 1980. "Performance of International Grain Marketing Systems: Discussion," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 62(5), pages 904-905.
    3. 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.
    4. Maury E. Bredahl & Leonardo Green, 1983. "Residual Supplier Model of Coarse Grains Trade," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 65(4), pages 785-790.
    5. 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.
    6. Margaret S. Andrews & Gordon C. Rausser, 1986. "Some Political Economy Aspects of Macroeconomic Linkages with Agriculture," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 68(2), pages 413-417.
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