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Identifying Macroeconomic Linkages to U.S. Agricultural Trade Balance

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  • Jungho Baek
  • Won W. Koo

Abstract

"This study explores the short-run and long-run relationships between the U.S. agricultural trade balance and domestic macroeconomic aggregates and agricultural variables. We use cointegration analysis and a vector error-correction model with quarterly data for 1981-2003. The results show that, in the long run, the exchange rate, agricultural price, and disposable income are weakly exogenous in the U.S. agricultural sector and have significant effects on the trade balance. The combined short-run dynamic effects of the exchange rate, agricultural price and production, and the disposable income jointly explain changes in the trade balance." Copyright (c) 2008 Canadian Agricultural Economics Society.

Suggested Citation

  • Jungho Baek & Won W. Koo, 2008. "Identifying Macroeconomic Linkages to U.S. Agricultural Trade Balance," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 56(1), pages 63-77, March.
  • Handle: RePEc:bla:canjag:v:56:y:2008:i:1:p:63-77
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    References listed on IDEAS

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    Cited by:

    1. Houssem Eddine Chebbi & Marcelo Olarreaga, 2011. "Agricultural Trade Balance and Exchange Rate Depreciation: The Case of Tunisia," Working Papers 610, Economic Research Forum, revised 08 Jan 2011.

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