Impacts of Energy Shocks on US Agricultural Productivity Growth and Food Prices —A Structural VAR Analysis
AbstractThis study proposes to use a structural VAR model, using annual percentage change series on U.S. gasoline prices, agricultural productivity, real GDP, agricultural exports, and agricultural commodity prices, to assess the impact of energy shocks on U.S. agricultural productivity growth and food price variations. These data span the period 1948 to 2009. Study results indicate that in the short-run (1 year) an energy shock and a productivity shock each accounts equally for 10 percent of the food price volatility. However, the impact from an energy shock overweighs the contribution of a productivity shock in the intermediate term (3 years), where an energy shock’s contribution increases to twice as much as a productivity shock’s contribution (16 percent compared to 8 percent). Besides the specific food market shock, the global demand shock in U.S. agricultural exports is the major factor in explaining the volatility in U.S. food prices, and accounts for one-third of the food price fluctuations.
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Bibliographic InfoPaper provided by Agricultural and Applied Economics Association in its series 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington with number 124892.
Date of creation: 2012
Date of revision:
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Energy shock; Total Factor Productivity (TFP); U.S. agriculture; food price; Structural VAR model; Agricultural and Food Policy; Resource /Energy Economics and Policy;
This paper has been announced in the following NEP Reports:
- NEP-AGR-2012-06-25 (Agricultural Economics)
- NEP-ALL-2012-06-25 (All new papers)
- NEP-BEC-2012-06-25 (Business Economics)
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