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Impacts of Energy Shocks on US Agricultural Productivity Growth and Food Prices —A Structural VAR Analysis

Sun Ling Wang and Lihong McPhail ()

No 124892, 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington from Agricultural and Applied Economics Association

Abstract: This study proposes to use a structural VAR model, using annual percentage change series on U.S. gasoline prices, agricultural productivity, real GDP, agricultural exports, and agricultural commodity prices, to assess the impact of energy shocks on U.S. agricultural productivity growth and food price variations. These data span the period 1948 to 2009. Study results indicate that in the short-run (1 year) an energy shock and a productivity shock each accounts equally for 10 percent of the food price volatility. However, the impact from an energy shock overweighs the contribution of a productivity shock in the intermediate term (3 years), where an energy shock’s contribution increases to twice as much as a productivity shock’s contribution (16 percent compared to 8 percent). Besides the specific food market shock, the global demand shock in U.S. agricultural exports is the major factor in explaining the volatility in U.S. food prices, and accounts for one-third of the food price fluctuations.

Keywords: Agricultural and Food Policy; Resource /Energy Economics and Policy (search for similar items in EconPapers)
Pages: 29
Date: 2012
New Economics Papers: this item is included in nep-agr and nep-bec
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea12:124892

DOI: 10.22004/ag.econ.124892

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