Agricultural Commodity Prices and Exchange Rates under Structural Change

Patrick Hatzenbuehler, Philip Abbott and Kenneth Foster

Journal of Agricultural and Resource Economics, 2016, vol. 41, issue 2

Abstract: That exchange rates strongly influence agricultural commodity prices is a widely held belief. Observed divergences in price and exchange rate correspondence over time, however, have occasionally brought this conventional wisdom into doubt. We empirically test and find evidence to support hypotheses that key supply-use factors, such as low stocks and policy shifts, intermittently cause greater responsiveness of agricultural commodity prices to exchange rate changes because they give rise to more inelastic market demand. After accounting for these longrun effects, we also find that short-run price responsiveness to exchange rate changes is sometimes greater due to overshooting factors.

Keywords: Agricultural and Food Policy; International Relations/Trade (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (13)

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Working Paper: Agricultural Commodity Prices and Exchange Rates under Structural Change (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:jlaare:235153

DOI: 10.22004/ag.econ.235153

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