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Exchange Rates, Trade Deficits, and U.S. Prices

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  • S. Devadoss
  • William H. Meyers
  • Stanley R. Johnson
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    Abstract

    Granger Causality tests are run to examine the causal relationships between the trade deficit, another macroeconomic variable, and U.S. prices. The results show that strong causal relationships run from the trade deficit to agricultural prices but not to nonagricultural prices. Results of causality tests also indicate that the huge trade deficit is caused by a strong U.S. dollar.

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    File URL: http://www.card.iastate.edu/publications/DBS/PDFFiles/86wp10.pdf
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    File URL: http://www.card.iastate.edu/publications/synopsis.aspx?id=714
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    Bibliographic Info

    Paper provided by Center for Agricultural and Rural Development (CARD) at Iowa State University in its series Center for Agricultural and Rural Development (CARD) Publications with number 86-wp10.

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    Date of creation: Jul 1986
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    Handle: RePEc:ias:cpaper:86-wp10

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