Campus Units

Economics

Document Type

Book Chapter

Publication Version

Published Version

Publication Date

2011

Journal or Book Title

Public Policy in Food and Agriculture

Editors

Azzeddine M. Azzam

Publisher

Eolss Publishers

Place of Publication

Paris, France

First Page or Article ID Number

318

Last Page

336

Abstract

This paper analyzes the impact of real exchange rate movements on the composition of trade in value-added and intermediate goods. It is shown that following a depreciation of the exporting country’s currency, the cost of importing value-added products declines relative to the cost of adding value to imported intermediate inputs. In equilibrium the composition of the resulting trade vector depends upon the relative magnitudes of price changes and import demand elasticities. Via simulation, the theoretical results are applied to U.S. trade in meat and feed grains. The papers conclusions have relevance for the development of integrated exchange rate, trade, and industrialization policies.

Comments

This is a chapter from Public Policy in Food and Agriculture, 2011, 318-336. Posted with permission.

Copyright Owner

Encyclopedia of Life Support Systems (EOLSS)

Language

en

File Format

application/pdf