EXPLORING THE TRANSMISSION OF INTERNATIONAL AND DOMESTIC ECONOMIC SHOCKS TO U.S. AGRICULTURE

Amyaz Moledina and Terry Roe

No 21751, 2000 Annual meeting, July 30-August 2, Tampa, FL from American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association)

Abstract: As growth in world trade outpaces the growth in world Gross Domestic Product (GDP), economies are becoming ever more linked through world markets (Helpman, 1998). It is evident that U.S. agriculture is also becoming increasingly affected by changes or economic shocks in world markets and that this response is conditional on the response of other sectors with which it must compete for economy-wide resources. This paper links the U.S. agricultural sector with its bilateral trading partners by deriving "shock transmission functions". These functions link the direct effects of world economic shocks to the price of four U.S. (export) commodities namely meat, dairy, grains and crops. We derive a price equation that is a function of the product of income between the United States and it's trading partner among other explanatory variables. The coefficient estimates from these equations can be interpreted as price transmission elasticities. These elasticities are used to conduct policy experiments.

Keywords: International; Relations/Trade (search for similar items in EconPapers)
Pages: 22
Date: 2000
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea00:21751

DOI: 10.22004/ag.econ.21751

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