Impacts of energy shocks on US agricultural productivity growth and commodity prices—A structural VAR analysis

Sun Ling Wang and Lihong McPhail

Energy Economics, 2014, vol. 46, issue C, 435-444

Abstract: We examine the impacts of energy price shocks on U.S. agricultural productivity growth and commodity prices' volatility by developing a structural VAR model. We use historical annual data of real U.S. gasoline prices, agricultural total factor productivity (TFP), real GDP, real agricultural exports, and real agricultural commodity price from 1948 to 2011 to estimate the model. Our results indicate that an energy price shock has a negative impact on productivity growth in the short run (1year). An energy price shock and an agricultural productivity shock each account for about 10% of U.S. agricultural commodity price volatility with the productivity shock's contribution slightly higher. However, the impact from energy prices outweighs the contribution of agricultural productivity in the medium term (3years). With more persistent impacts, energy shocks contribute to most (about 15%) of commodity price's variation in the long run.

Keywords: U.S. agricultural productivity growth; Total factor productivity (TFP); Energy shocks; Agricultural commodity prices; Structural VAR analysis (search for similar items in EconPapers)
JEL-codes: C3 G2 O4 Q1 Q2 Q4 (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (38)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:46:y:2014:i:c:p:435-444

DOI: 10.1016/j.eneco.2014.05.006

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