Dynamic impacts of a shock in crude oil price on agricultural chemical and fertilizer prices

Ronald A. Babula and Agapi Somwaru
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Ronald A. Babula: National Aggregate Analysis Section, Economic Research Service, US Department of Agriculture (ERS|USDA), Postal: National Aggregate Analysis Section, Economic Research Service, US Department of Agriculture (ERS|USDA)

Agribusiness, 1992, vol. 8, issue 3, 243-252

Abstract: A monthly vector autoregression (VAR) model of the following prices was estimated over the 1962:1-1990:6 period: crude oil price (CRUDE), industrial chemical price (INDCHEM), agricultural chemical price (AGCHEM), and fertilizer price (FERT). The VAR was shocked with a rise in CRUDE, and dynamic impulse response patterns in AGCHEM and FERT were observed. Results suggest that AGCHEM and FERT responses would be increases; would be mild for half a year; would thereafter gain in strength and peak within 19 to 21 months; and would last for 2.0 to 2.3 years. AGCHEM and FERT would rise by about one-fourth of the percentage increase in CRUDE which occurs over the response period.

Date: 1992
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Persistent link: https://EconPapers.repec.org/RePEc:wly:agribz:v:8:y:1992:i:3:p:243-252

DOI: 10.1002/1520-6297(199205)8:3<243::AID-AGR2720080305>3.0.CO;2-K

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