The strength of the dollar: An analysis of trade-weighted foreign exchange rate indices with implications for agricultural trade

David Henneberry, Shida Henneberry and Luther Tweeten
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David Henneberry: Department of Agricultural Economics at Oklahoma State University, Postal: Department of Agricultural Economics at Oklahoma State University
Shida Henneberry: Department of Agricultural Economics at Oklahoma State University, Postal: Department of Agricultural Economics at Oklahoma State University
Luther Tweeten: Department of Agricultural Economics at Oklahoma State University, Postal: Department of Agricultural Economics at Oklahoma State University

Agribusiness, 1987, vol. 3, issue 2, 189-206

Abstract: The foreign exchange value of the US dollar has had a major impact on agricultural trade flows in the 1980s. However, measurement and interpretation of the appreciation of the US dollar must be done with caution. In this article, three different methodologies (Paasche, Laspeyres, and Fisher Ideal) are used to calculate a trade weighted foreign exchange rate representing six flows of US export goods (total exports, all nonagricultural exports, all agricultural exports and wheat, corn, and soybeans individually). The indices are calculated for both real and nominal foreign exchange rates. Implications for agricultural trade are suggested by applying these estimates of the dollar appreciation to previously estimated elasticities of US agricultural export demand with respect to the foreign exchange rate.

Date: 1987
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Persistent link: https://EconPapers.repec.org/RePEc:wly:agribz:v:3:y:1987:i:2:p:189-206

DOI: 10.1002/1520-6297(198722)3:2<189::AID-AGR2720030206>3.0.CO;2-J

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