The Causality Between U.S.A. and Australian Wheat Prices

Peter Sniekers and Gordon Wong

Review of Marketing and Agricultural Economics, 1987, vol. 55, issue 01, 14

Abstract: It has been generally agreed that Australia is a price follower on the world wheat market. However, to date, this has not been tested empirically. In this paper a transfer function model between prices of U.S.A. wheat and Australian wheat is set up to examine the existence, if any, of a leader-follower relationship. By employing the causality criteria as described by Granger, this analysis is implemented to draw inferences about causality among these wheat prices. Results indicated that a significant leader-follower relationship exists, with the U.S.A. taking the leader role. The results reported are particularly useful for wheat price forecasting work and provide a basis for further modelling work.

Keywords: Crop Production/Industries; Demand and Price Analysis (search for similar items in EconPapers)
Date: 1987
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Persistent link: https://EconPapers.repec.org/RePEc:ags:remaae:12313

DOI: 10.22004/ag.econ.12313

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