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Contribution to Book
Exchange Rate Impacts on the Composition of Agricultural Trade
Public Policy in Food and Agriculture
Document Type
Book Chapter
Disciplines
Publication Version
Published Version
Publication Date
1-1-2011
Editors
Azzeddine M. Azzam
Publisher
Eolss Publishers
Place of Publication
Paris, France
Abstract
This paper analyzes the impact of real exchange rate movements on the composition of trade in value-added and intermediate goods. It is shown that following a depreciation of the exporting country’s currency, the cost of importing value-added products declines relative to the cost of adding value to imported intermediate inputs. In equilibrium the composition of the resulting trade vector depends upon the relative magnitudes of price changes and import demand elasticities. Via simulation, the theoretical results are applied to U.S. trade in meat and feed grains. The papers conclusions have relevance for the development of integrated exchange rate, trade, and industrialization policies.
Copyright Owner
Encyclopedia of Life Support Systems (EOLSS)
Copyright Date
2011
Language
en
File Format
application/pdf
Citation Information
Frank Fuller and Dermot J. Hayes. "Exchange Rate Impacts on the Composition of Agricultural Trade" Public Policy in Food and Agriculture (2011) p. 318 - 336 Available at: http://works.bepress.com/dermot_hayes/182/
This is a chapter from Public Policy in Food and Agriculture, 2011, 318-336. Posted with permission.