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Análise da elasticidade de transmissão de preços no mercado brasileiro de algodão [Analysis of price transmission elasticity in the Brazilian cotton market]

Author

Listed:
  • Marisa Zeferino Barbosa

    (Instituto de Economia Agrícola)

  • Mário A. Margarido

    (Instituto de Economia Agrícola)

  • Sebastião Nogueira Junior

    (Instituto de Economia Agrícola)

Abstract

The article analyzes the elasticity of price transmission in the Brazilian cotton market from January, 1985, to December, 2000. For this purpose, the Dickey-Fuller Augmented (ADF) unit root test, the Johansen cointegration test, the Vector Error Correction model (VEC), and the exogenicity test are applied. The results show that the One Price Law does not apply to the Brazilian cotton market, because variations in cotton international prices are not fully transmitted to domestic prices in Brazil in the long run. The exogenicity test shows that domestic cotton prices in Brazil do not react to changes in the long run equilibrium relationship. Possibly, these results are directly associated with government intervention in the sector (1985 to 1988) as well as to the credit conditions available for cotton acquisition in the international market between 1990 and 1997.

Suggested Citation

  • Marisa Zeferino Barbosa & Mário A. Margarido & Sebastião Nogueira Junior, 2002. "Análise da elasticidade de transmissão de preços no mercado brasileiro de algodão [Analysis of price transmission elasticity in the Brazilian cotton market]," Nova Economia, Economics Department, Universidade Federal de Minas Gerais (Brazil), vol. 12(2), pages 79-108, July-Dece.
    • Handle: RePEc:nov:artigo:v:12:y:2002:i:2:p:79-108
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    More about this item

    Keywords

    cotton; the one price law; cointegration; international trade; price transmission;
    All these keywords.

    JEL classification:

    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models

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