The Impacts Of Agricultural Trade On The Volatility Of Domestic Agricultural Price

With the high speed growth of economic globalization,the affect of international trade on the internal and external balance of a country’s economy has gradually deepened.The transmission of external shocks brought about by international trade will not only cause fluctuations in domestic prices and hinder the stable development of the country’s economy,but also worsen a country’s break even.The domestic price level is an important indicator for monitoring economic operations,and the price of agricultural products is the most important component of domestic prices.The stability of the supply and demand relationship of agricultural products is important guarantees for social stability and are extremely important for a country’s economic development and social order.With the improvement of the level of integration of global agricultural product markets,it is significant to discuss the role of agricultural product trade on domestic agricultural product price fluctuations based on the perspective of exchange rate misalignment.In the theoretical analysis,this paper introduces the factor of exchange rate misalignment based on Watson’s DSGE model,and explores the affect of agricultural product trade on domestic agricultural product price fluctuations in detail based on the perspective of exchange rate misalignment.In the empirical analysis,an empirical method of estimating international trade in agricultural products and domestic price fluctuations using the production shock as a tool is adopted.,and then this paper also identifies the causal relationship between domestic agricultural product price fluctuations and agricultural product trade.In the analysis of the mechanism of exchange rate misalignment,based on the original model,the interaction term of exchange rate misalignment and agricultural product trade is introduced for analysis and discussion.All agricultural product-level data used in this article are from the official website of the United States Department of Agriculture Production Supply and Supply Chain Database and the United Nations Food and Agriculture Organization database.The corresponding macroeconomic indicators such as GDP and other indicators are from WDI In the database,the last sample time is from 1990 to 2020,the sample countries are 188 countries and regions,and the sample products are 37 kinds of agricultural products.The specific country names and product names are shown in the appendix.Finally,the conclusions drawn on the impact of agricultural product trade on domestic agricultural product price fluctuations are verified by using different robustness testing methods.Finally,this paper draws the following conclusions: the trade of agricultural products aggravates the trend of domestic price fluctuations of agricultural products;the affect of agricultural product trade on the price fluctuations of domestic agricultural products is more obvious during the period of price decline;the overall exchange rate misalignment is the effect of agricultural product trade on domestic agricultural product price fluctuations.The effect of agricultural product price fluctuations has been significantly enhanced;when the exchange rate is upwardly biased,the exchange rate misalignment will strengthen the tradeprice volatility mechanism;but when the exchange rate is biased downwards,the exchange rate misalignment will weaken the trade-price.The mechanism of fluctuation;the performance of exchange rate dislocation in the mechanism of agricultural trade-domestic agricultural price fluctuations is heterogeneous among countries with different income levels.