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Pass‐Through of Exchange Rates and Tariffs in Brazil—U.S. Tobacco Trade
Author(s) -
Pompelli Gregory K.,
Pick Daniel H.
Publication year - 1990
Publication title -
american journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.949
H-Index - 111
eISSN - 1467-8276
pISSN - 0002-9092
DOI - 10.2307/1243037
Subject(s) - tariff , exchange rate , international economics , economics , international trade , agriculture , business , monetary economics , ecology , biology
This paper examines the extent to which exchange rate and tariff changes are passed through in U.S. import prices of unmanufactured tobacco from Brazil. The model used considers the possibility of market imperfections in international trade and the potential effects of strategic trade policies. The results indicate that agricultural prices may not be as flexible as commonly thought. Furthermore, exchange rate and tariff changes are not fully passed through to U.S. tobacco import prices, which indicates that firms selling Brazilian tobacco may use trade strategies to maintain or even increase their trade shares in the U.S. tobacco market.