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Exchange Rate Regimes and Agricultural Trade

Exchange Rate Regimes and Agricultural Trade. Tola Oyeyemi Emma Phillips Gary Xia. Think about this…. Images: http://www.dw.de/nuclear-waste-shipment-continues-to-spark-determined-protests/a-6201316 http://www.marxist.com/greek-december-short-balance-sheet.htm

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Exchange Rate Regimes and Agricultural Trade

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  1. Exchange Rate Regimes and Agricultural Trade Tola Oyeyemi Emma Phillips Gary Xia

  2. Think about this… Images: http://www.dw.de/nuclear-waste-shipment-continues-to-spark-determined-protests/a-6201316 http://www.marxist.com/greek-december-short-balance-sheet.htm http://www.apostropher.com/blog/archives/001542.html

  3. Question What is the effect of agricultural trade on exchange rate regimes?

  4. Background on Independent Variable Decline Still a Loud Voice • Globalization, Industrialization • <1960 = 30% of all merch trade • By 2000, <9% • Dwight Watson • Thousands in damages • 10 block area shut down in DC • Federal offices evacuated • In 2012 alone: • Serbia, India, Paraguay Anderson, 2010, p. 3009 Leonnig, 2003 United Press Int’l, 2012; Prensa Latina, 2012; The Times of India, 2012) Image: http://www.apostropher.com/blog/archives/001542.html .

  5. Background on Dependent Variable • Exchange rate regimes: • Float, fix, peg • The Gold Standard Bretton-Woods Float • Mundell-Fleming Trilemma: • Free flow $, exΔ rate certainty, policy-making autonomy • “Flexibility vs. credibility”(Singer, 2010) Elwell, 2011; Singer, 2010 Image: http://www.voxeu.org/article/empirical-evidence-monetary-policy-trilemma-1970

  6. Hypotheses Hypotheses Hypotheses Hypotheses Hypotheses Hypotheses Hypotheses Hypotheses If a country has large… They would move towards a… Share of GDP in the agricultural sector Share of GDP in agricultural exporting Share of GDP in Domestic Agriculture • Pegged Rate • Pegged Rate • Floating Rate

  7. Methods • Data Sets: Singer & WDI • 1980 to 2008 • Independent Variable  Agricultural Economy • Agriculture’s %GDP per capita • Exports in Agriculture (% of GDP) • Domestic Agriculture (% of GDP) • Dependent Variable  Exchange Rate Regimes • IMF scale: 1 = fully fixed, 4 = fully floating

  8. More Variables • Test for Robustness • Control Variables Lagged Dependent Variable -Remittances -Exports -Reserves -Democracy -Inflation -Manufacturing -A few more…

  9. Results

  10. Conclusions • Agriculture (%GDP) insignificant • Exports consistently negative and significant • Last hypothesis unsupported • Remittances insignificant when agriculture is accounted for

  11. Analysis If a country has large… They would move towards a… Share of GDP in the agricultural sector Share of GDP in agricultural exporting Share of GDP in Domestic Agriculture • Pegged Rate • Pegged Rate • Floating Rate

  12. Why are these results important? • Exchange rates are highly manipulated • What influences exchange rates? • Many variables to consider • Well-being of people

  13. Continuing our Work • Introduction to larger macroeconomic issues • Looking at international trade as a whole • More accurate and comprehensive data • Imports, more countries, etc.

  14. Thank You! Questions? Comments? Concerns?

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