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On the Dynamic Relationship between U.S. Farm Income and Macroeconomic Variables

Published online by Cambridge University Press:  26 January 2015

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

This study examines the short- and long-run effects of changes in macroeconomic variables—agricultural commodity prices, interest rates and exchange rates—on the U.S. farm income. For this purpose, we adopt an autoregressive distributed lag (ARDL) approach to cointegration with quarterly data for 1989–2008. Results show that the exchange rate plays a crucial role in determining the long-ran behavior of U.S. farm income, but has little effect in the short-run. We also find that the commodity price and interest rate have been significant determinants of U.S. farm income in both the short- and long-run over the past two decades.

Keywords

autoregressive distributed lag modelcommodity priceexchange ratefarm incomeinterest ratelong-runshort-runC22E23Q11

Information

Type
Invited Paper Sessions
Information
Journal of Agricultural and Applied Economics , Volume 41 , Issue 2 , August 2009 , pp. 521 - 528
Copyright
Copyright © Southern Agricultural Economics Association 2009

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