Premium
The strength of the dollar: An analysis of trade‐weighted foreign exchange rate indices with implications for agricultural trade
Author(s) -
Henneberry David,
Henneberry Shida,
Tweeten Luther
Publication year - 1987
Publication title -
agribusiness
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.57
H-Index - 43
eISSN - 1520-6297
pISSN - 0742-4477
DOI - 10.1002/1520-6297(198722)3:2<189::aid-agr2720030206>3.0.co;2-j
Subject(s) - liberian dollar , economics , exchange rate , agriculture , international economics , value (mathematics) , foreign exchange , international trade , agricultural economics , monetary economics , mathematics , statistics , finance , ecology , biology
The foreign exchange value of the US dollar has had a major impact on agricultural trade flows in the 1980s. However, measurement and interpretation of the appreciation of the US dollar must be done with caution. In this article, three different methodologies (Paasche, Laspeyres, and Fisher Ideal) are used to calculate a trade weighted foreign exchange rate representing six flows of US export goods (total exports, all nonagricultural exports, all agricultural exports and wheat, corn, and soybeans individually). The indices are calculated for both real and nominal foreign exchange rates. Implications for agricultural trade are suggested by applying these estimates of the dollar appreciation to previously estimated elasticities of US agricultural export demand with respect to the foreign exchange rate.