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Macro-monetary effects on agricultural prices: the case of Greek agriculture

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  • Efstratios Loizou
  • Kostandinos Mattas
  • Angelos Pagoulatos

Abstract

The macroeconomic effects on agricultural prices in the Greek economy and, in particular, differences in prices paid and received by farmers (cost-price squeeze) are examined employing integration and cointegration analysis. A Johansen cointegration test between prices paid and prices received by farmers supports the presence of cost-price squeeze, since non-cointegration between the two price indices cannot be rejected. In other words, prices paid by farmers respond more than prices received by farmers during inflationary periods and hence affect their parity ratio. Multivariate cointegration tests indicated that forces outside agriculture can explain the non-cointegration between farm input and output prices. These forces are monetary macro variables through the country's macroeconomic policy, such as money supply, the general price level and the domestic product.

Suggested Citation

  • Efstratios Loizou & Kostandinos Mattas & Angelos Pagoulatos, 1997. "Macro-monetary effects on agricultural prices: the case of Greek agriculture," Applied Economics Letters, Taylor & Francis Journals, vol. 4(7), pages 397-400.
    • Handle: RePEc:taf:apeclt:v:4:y:1997:i:7:p:397-400
    DOI: 10.1080/135048597355113
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    References listed on IDEAS

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    1. John C. Robertson & David Orden, 1990. "Monetary Impacts on Prices in the Short and Long Run: Some Evidence from New Zealand," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 72(1), pages 160-171.
    2. Engle, Robert & Granger, Clive, 2015. "Co-integration and error correction: Representation, estimation, and testing," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 39(3), pages 106-135.
    3. Charles B. Moss, 1992. "The Cost-Price Squeeze in Agriculture: An Application of Cointegration," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 14(2), pages 205-213.
    4. Dickey, David A & Fuller, Wayne A, 1981. "Likelihood Ratio Statistics for Autoregressive Time Series with a Unit Root," Econometrica, Econometric Society, vol. 49(4), pages 1057-1072, June.
    5. Doo Bong Han & John B. Penson & Dennis W. Jansen, 1990. "Variance of Agricultural Prices, Industrial Prices, and Money," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 72(4), pages 1066-1073.
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    1. Christos P. Pappas & Christos T. Papadas, 2015. "Farm Production Costs, Producer Prices and Retail Food Prices in Greece: A Cointegration Analysis," Bulletin of Political Economy, Bulletin of Political Economy, vol. 9(2), pages 127-143, December.
    2. Dritsakis, Nikolaos, 2003. "The Agricultural Sector in the Macroeconomic Environment: An Empirical Approach for EU," Agricultural Economics Review, Greek Association of Agricultural Economists, vol. 4(1), pages 1-10, January.
    3. Katsouli, E. & Vogiatzis, A. & Manitsaris, A., 2002. "Linking consumer prices to wholesale prices: Error correction models for the case of Greece," Agricultural Economics Review, Greek Association of Agricultural Economists, vol. 3(1), pages 1-11, January.
    4. Tabakis, Nikolaos M., 2001. "A Multivariate Model for the Relationship Between Agricultural Prices and Inflation Uncertainty: Evidence Using Greek Data," Agricultural Economics Review, Greek Association of Agricultural Economists, vol. 2(1), pages 1-11, January.
    5. Ioanna Apostolidou & Achilleas Kontogeorgos & Anastasios Michailidis & Efstratios Loizou, 2014. "The Role of Agriculture in Economic Growth: A Comparison of Mediterranean and Northern Views in Europe," International Journal of Business and Economic Sciences Applied Research (IJBESAR), International Hellenic University (IHU), Kavala Campus, Greece (formerly Eastern Macedonia and Thrace Institute of Technology - EMaTTech), vol. 7(3), pages 81-102, December.
    6. Nikolaos Dritsakis & Antonios Adamopoulos, 2004. "The Causal Relationship Between Domestic Private Consumption and Wholesale Prices: The Case of European Union," European Research Studies Journal, European Research Studies Journal, vol. 0(3-4), pages 53-64.

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