Exchange Rates, Foreign Income, and U.S. Agriculture
AbstractThis paper focuses on estimating the effects of trade partner income and real trade-weighted exchange rates on US agricultural exports. For the period 1970-2003, a one percent annual increase in trade partners’ income is found to increase total agricultural exports by about 1.6 percent while a one percent appreciation of the dollar relative to trade partner trade-weighted currencies decreases total agricultural exports by about 0.8 percent. We find these effects also carry over to 12 commodity subcategories, although the effects are conditioned by differences between bulk and high value commodities, and differences in the export demand from high compared to low income countries. We also find that the negative effect of exchange rate appreciation on exports often dominates the positive effect from income growth.
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Bibliographic InfoPaper provided by University of Minnesota, Center for International Food and Agricultural Policy in its series Conference Papers with number 6686.
Date of creation: Aug 2006
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More information through EDIRC
Exchange rates; U.S. agricultural trade; U.S. agricultural commodity exports; U.S. agricultural export prices; foreign income; International Relations/Trade; F10; F14; Q17;
Other versions of this item:
- Roe, Terry L. & Shane, Mathew & Somwaru, Agapi, 2006. "Exchange Rates, Foreign Income and U.S. Agriculture," Bulletins 12975, University of Minnesota, Economic Development Center.
- F10 - International Economics - - Trade - - - General
- F14 - International Economics - - Trade - - - Empirical Studies of Trade
- Q17 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agriculture in International Trade
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