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The U.S. Agricultural Sector and the Macroeconomy

Published online by Cambridge University Press:  26 January 2015

Jungho Baek  and
Won W. Koo
Jungho Baek
Affiliation:
Department of Economics, University of Alaska, Fairbanks, Alaska
Won W. Koo
Affiliation:
Department of Agribusiness and Applied Economics, North Dakota State University, Fargo, North Dakota
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Abstract

The effects of the exchange rate, the U.S. agricultural price, the domestic income, and the interest rate on the U.S. net farm income are investigated in a cointegration framework. For this purpose, the Phillips-Hansen fully-modified cointegration (FM-OLS) procedure is applied to annual data for the period 1957-2008. Results suggest that there exists the long-run equilibrium relationship between the U.S. net farm income and the selected macroeconomic variables. We also find that the exchange rate and U.S. agricultural price are more important than other variables in determining the U.S. net farm income.

Keywords

agricultural priceexchange rategross domestic productinterest ratenet farm incomePhillips-Hansen fully-modified cointegration techniqueC22E23Q11
Type
Invited Paper Sessions
Information
Journal of Agricultural and Applied Economics , Volume 42 , Issue 3 , August 2010 , pp. 457 - 465
Copyright
Copyright © Southern Agricultural Economics Association 2010

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