The Impact Of Economic Policy Uncertainty On Agricultural Prices

Review the development of Chinese agriculture and agricultural development and agricultural price fluctuations,It can be found that among many influence factors of agricultural development and agricultural product price fluctuations,the outbreak of epidemic disease,macro policy shift,economic crisis and many other economic policy uncertainty events play a more important role in agricultural product prices.The purpose of this paper is to analyze the relationship between economic policy uncertainty index and agricultural commodity prices.As basic agricultural economic research,the theoretical significance of this article is to study the uncertainty of economic policy research on agricultural prices from a new perspective and enrich the current related theory of the studies on the agricultural prices;The practical significance of this paper is to study the effects of economic uncertainty in different commodity attributes and market price determination models through descriptive analysis and establishment of the FAVAR model.Based on China economic policy uncertainty index and major agricultural product(pork,chicken,beef,beans,rice,corn)prices data from 1 January 2005—December 2016,T he paper analyzes impact of economic policy uncertainty on China's agricultural prices with FAVAR model.The details are as follows:First,to describe the fluctuation trend of pork,chicken,beef,corn,beans,rice prices and economic policy uncertainty index with statistical analysis.Second,this paper uses the FAVAR model to examine the dynamic relationship between economic policy uncertainty and agricultural prices.Specially,the impulse response function is used to examine the impact and sustainability of economic policy uncertainty on the prices of agricultural product.Using principal component analysis the main source of impact.The conclusions are as follow:First,economic policy uncertainty has a larger impact on main grain prices.In short term,The impact of economic policy uncertainty on two kinds of main agricultural products is intense mainly on negative impact and then there will be a sharp rebound.Second,The impact on two kinds of main agricultural products prices has different performance in different lag periods.With the enlargement of the lagging periods,shocks ebb,showing that with the implementation of the time,two kinds of livestock products market can effectively regulate and reduce the impact,making the price run smoothly.Third,grain agricultural and livestock product response to the fluctuation of economic policy uncertainty differently.Among grain products,the impact on beans is the most dramatic,maize and rice react similarly.Among livestock products,the impact on beef is the most severe,pork and chicken react similarly.