Exchange rate volatility and agricultural trade flows: The case of the United States and OECD countries

Document Type

Article

Publication Date

1-1-2016

Abstract

© 2016 by Nova Science Publishers, Inc. All rights reserved. This study documents the effect of exchange rate volatility and the real exchange rate on bilateral agricultural trade flows between the United States and OECD countries. In addition, implementation of Free Trade Agreements (FTAs) and use of the Euro as a national currency are investigated to determine their impacts. The Gravity Model was applied to bilateral trade flow panel data from 1970 to 2010. Results show that exchange rate volatility and the real exchange rate have a statistically significant and negative effect on both agricultural and non-agricultural trade flows. Exchange rate volatility is found to have a greater impact on the agricultural sector, while the real exchange rate has a greater impact on the non-agricultural sector. Effects of FTAs and the Euro are always found to be positive, with FTAs having a greater impact on the agricultural sector and the Euro on the non-agricultural sector.

Publication Source (Journal or Book title)

Emerging Issues in Global International Agricultural Trade and Development

First Page

101

Last Page

121

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