African Journal of
Agricultural Research

  • Abbreviation: Afr. J. Agric. Res.
  • Language: English
  • ISSN: 1991-637X
  • DOI: 10.5897/AJAR
  • Start Year: 2006
  • Published Articles: 6574

Full Length Research Paper

Impacts of the exchange rate and world income on Brazilian agricultural exports

Carlos Alberto Gonçalves da Silva
  • Carlos Alberto Gonçalves da Silva
  • Faculdade de Ciências Econômicas, Universidade do Estado do Rio de Janeiro (UERJ), Rua São Francisco Xavier, 524 - sala 8031A, 20550-013, Rio de Janeiro, RJ, Brazil.
  • Google Scholar
Léo da Rocha Ferreira
  • Léo da Rocha Ferreira
  • Faculdade de Ciências Econômicas, Universidade do Estado do Rio de Janeiro (UERJ), Rua São Francisco Xavier, 524 - sala 8031A, 20550-013, Rio de Janeiro, RJ, Brazil.
  • Google Scholar
Salatiel Turra
  • Salatiel Turra
  • Faculdade de Ciências Econômicas, Universidade do Estado do Rio de Janeiro (UERJ), Rua São Francisco Xavier, 524 - sala 8031A, 20550-013, Rio de Janeiro, RJ, Brazil.
  • Google Scholar


  •  Received: 01 June 2017
  •  Accepted: 27 June 2017
  •  Published: 06 July 2017

Abstract

The main objective of this paper was to analyse to what extent the Brazilian agricultural exports responds to changes in the real exchange rate and in the world income for the 2000 to 2014 period (monthly). The results showed that the coefficient of the value of agricultural exports in relation to the exchange rate was inelastic in the long run (0.2540). However, the adjustment coefficient of the exported value in relation to world income was equal to 1.8981 (elastic), which in turn indicates that maintaining the exchange rate variable constant, a 10% increase in world income should increase the exported value in about 19% over the long run. However, in the short run, the weightings set indicated a low speed of adjustment toward the long run equilibrium of each variable, that is, in the event of an imbalance in any one of the variables of the model, its own correction will slowly take place toward the long run equilibrium. In the variance decomposition analysis, the results showed that the world income is more important than the exchange rate in the explanation of the variance error of the agricultural exports.

Key words: Brazilian agricultural exports, exchange rate, world income, co-integration, auto-regression model.