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Dynamic impacts of a shock in crude oil price on agricultural chemical and fertilizer prices
Author(s) -
Babula Ronald A.,
Somwaru Agapi
Publication year - 1992
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(199205)8:3<243::aid-agr2720080305>3.0.co;2-k
Subject(s) - economics , fertilizer , shock (circulatory) , agriculture , crude oil , oil price , agricultural economics , environmental science , monetary economics , chemistry , petroleum engineering , engineering , biology , medicine , ecology , organic chemistry
A monthly vector autoregression (VAR) model of the following prices was estimated over the 1962:1–1990:6 period: crude oil price (CRUDE), industrial chemical price (INDCHEM), agricultural chemical price (AGCHEM), and fertilizer price (FERT). The VAR was shocked with a rise in CRUDE, and dynamic impulse response patterns in AGCHEM and FERT were observed. Results suggest that AGCHEM and FERT responses would be increases; would be mild for half a year; would thereafter gain in strength and peak within 19 to 21 months; and would last for 2.0 to 2.3 years. AGCHEM and FERT would rise by about one‐fourth of the percentage increase in CRUDE which occurs over the response period.