Study On The Influence Of EPU On The Price Of Agricultural Products

The production of agricultural products is different from that of other industries.Agricultural products generally have a very long production cycle,so there is often a long production time interval between demand and supply,which leads to the contradiction between supply and demand of agricultural products due to various uncertainties,leading to the occasional sharp rise and fall of some products in the agricultural product market in the short term.The longer production cycle increases the uncertainty of market supply and demand,especially the uncertainty of economic policy,which has a great relevance to the agricultural product market.The uncertainty of economic policy plays a role through the uncertainty that affects the relationship between supply and demand.On the one hand,when making production decisions,breeders face "ahead" demand signals.When market demand changes,they cannot immediately increase supply.On the other hand,they are "behind" economic policies.When economic policies are adjusted,they cannot immediately stop production.By studying the impact of economic policy uncertainty on the price of agricultural products,we can provide a basis for formulating reasonable economic policies and how to formulate economic policies more effectively.In order to use empirical analysis to explore the ways and characteristics that economic policy uncertainty affects agricultural product prices,pork prices and corn prices are selected as the representatives of agricultural product prices,China Economic Policy Uncertainty Index(EPU)and China Foreign Trade Policy Uncertainty Index(TPU)are selected as the representatives of economic policy uncertainty,and data from January 2012 to August 2022 are used as samples,First,DCC-GARCH model were used to analyze the correlation between economic policy with agricultural product price,and then SVAR model is used to analyze the impulse effect of economic policy uncertainty on agricultural product prices.The empirical analysis shows that the relationship between the uncertainty of China’s economic policy and foreign trade policy and the prices of different types of agricultural products is different.Among them,the dynamic correlation coefficients between EPU and TPU and corn prices are not stable,only in a few time intervals there is a continuous one-way impact,and in other times,although the dynamic correlation is high,it is not stable;The dynamic correlation between EPU and TPU and pork prices is relatively stable.The impact of EPU on pork prices can be divided into three stages.Before 2016,EPU and pork prices were positively correlated.From 2016 to 2018,there was a dynamic negative correlation between EPU and pork prices.From 2018 to 2021,the correlation remained at a very high level.The relationship between TPU and pork price is positive at most time points,especially after 2018.From the study of the pulse effect relationship,it can be concluded that EPU and TPU have obvious differences in the form of impact on the prices of two agricultural products.The pulse effect of EPU on the prices of corn and pork is instantaneous,that is,short rise and short fall,with no longer lasting.The pulse effect of TPU on the prices of corn and pork is short rise and long fall,with a longer tail.The uncertainty of foreign trade policy has a more lasting impact on the price of agricultural products.Finally,according to the empirical research on the uncertainty of the two economic policies and the relationship between the prices of the two agricultural products,the relevant policy recommendations are put forward.First,we should increase the transparency of agricultural market information and reduce the unpredictability of economic policies.Secondly,subdivide the types of agricultural products,and formulate different economic policies for different types of agricultural products.Finally,promote the internationalization of China’s agricultural market,develop domestic agriculture from an international perspective,and reduce the impact of the international market on the domestic market.