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Exploring The Transmission Of International And Domestic Economic Shocks To U.S. Agriculture

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  • Moledina, Amyaz A.
  • Roe, Terry L.

Abstract

As growth in world trade outpaces the growth in world Gross Domestic Product (GDP), economies are becoming ever more linked through world markets (Helpman, 1998). It is evident that U.S. agriculture is also becoming increasingly affected by changes or economic shocks in world markets and that this response is conditional on the response of other sectors with which it must compete for economy-wide resources. This paper links the U.S. agricultural sector with its bilateral trading partners by deriving "shock transmission functions". These functions link the direct effects of world economic shocks to the price of four U.S. (export) commodities namely meat, dairy, grains and crops. We derive a price equation that is a function of the product of income between the United States and it's trading partner among other explanatory variables. The coefficient estimates from these equations can be interpreted as price transmission elasticities. These elasticities are used to conduct policy experiments.

Suggested Citation

  • Moledina, Amyaz A. & Roe, Terry L., 2000. "Exploring The Transmission Of International And Domestic Economic Shocks To U.S. Agriculture," 2000 Annual meeting, July 30-August 2, Tampa, FL 21751, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    • Handle: RePEc:ags:aaea00:21751
    DOI: 10.22004/ag.econ.21751
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    References listed on IDEAS

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    1. Moledina, Amyaz A. & Roe, Terry L. & Shane, Mathew, 2004. "Measuring Commodity Price Volatility And The Welfare Consequences Of Eliminating Volatility," 2004 Annual meeting, August 1-4, Denver, CO 19963, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).

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