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The pass-through of exchange rate changes to the prices of Australian exports of dairy and livestock products

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  • Swift, Robyn

Abstract

Agricultural exports are usually assumed to operate in perfectly competitive international markets, but many are subject to non‐tariff barriers to trade that can affect the degree of pass‐through of exchange rate changes to foreign currency prices. The present study uses multivariate cointegration techniques to examine the effects of exchange rate changes on the prices of Australian exports of milk products, cheese, beef, sheepmeat, and hides and skins. The results indicate that Australian dairy exports operate in competitive markets in which pass‐through is complete, but there is no stable long‐run relationship between exchange rates and prices for any of the other livestock products.

Suggested Citation

  • Swift, Robyn, 2004. "The pass-through of exchange rate changes to the prices of Australian exports of dairy and livestock products," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 48(1), March.
  • Handle: RePEc:ags:aareaj:117865
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    File URL: http://purl.umn.edu/117865
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    References listed on IDEAS

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    1. Yumkella, K. K. & Unnevehr, L. J. & Garcia, P., 1994. "Noncompetitive Pricing and Exchange Rate Pass-Through in Selected U.S. and Thai Rice Markets," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 26(02), pages 406-416, December.
    2. Menon, Jayant, 1995. " Exchange Rate Pass-Through," Journal of Economic Surveys, Wiley Blackwell, vol. 9(2), pages 197-231, June.
    3. Irving B. Kravis & Robert E. Lipsey, 1975. "International Trade Prices and Price Proxies," NBER Chapters,in: The Role of the Computer in Economic and Social Research in Latin America, pages 253-268 National Bureau of Economic Research, Inc.
    4. Robert E. Lipsey & Linda Molinari & Irving B. Kravis, 1991. "Measures of Prices and Price Competitiveness in International Trade in Manufactured Goods," NBER Chapters,in: International Economic Transactions: Issues in Measurement and Empirical Research, pages 144-199 National Bureau of Economic Research, Inc.
    5. K.W. Clements & J. Freebairn, 1990. "Exchange Rates and Australian Commodity Exports," Economics Discussion / Working Papers 90-09, The University of Western Australia, Department of Economics.
    6. G. Edward Schuh, 1974. "The Exchange Rate and U. S. Agriculture," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 56(1), pages 1-13.
    7. Coyle, W. T. & Hayes, Dermot J. & Yamauchi, H., 1992. "Agriculture and Trade in the Pacific: Toward the Twenty-First Century," Staff General Research Papers Archive 449, Iowa State University, Department of Economics.
    8. Johansen, Soren, 1995. "Likelihood-Based Inference in Cointegrated Vector Autoregressive Models," OUP Catalogue, Oxford University Press, number 9780198774501.
    9. Cheung, Yin-Wong & Lai, Kon S, 1993. "Finite-Sample Sizes of Johansen's Likelihood Ration Tests for Conintegration," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 55(3), pages 313-328, August.
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    Cited by:

    1. Fedoseeva, Svetlana, 2013. "Do German exporters PTM? Searching for right answers in sugar confectionery exports," Discussion Papers 62, Justus Liebig University Giessen, Center for international Development and Environmental Research (ZEU).
    2. Cortes, Maria, 2007. "Examining Patterns of Bilateral Trade between Australia and Colombia by Using Cointegration Analysis and Error-Correction Models," Economics Working Papers wp07-20, School of Economics, University of Wollongong, NSW, Australia.

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