Files
Abstract
The aim of this work is to analyze the effect of shocks in the real exchange rate
in long and short-run on the Brazilian agricultural trade balance after the deployment of
Plano Real. The used methodological framework was an application of Johansen’s (1991)
multivariate analysis. Results indicate that two relations of long-run exist between the
agricultural trade balance and the domestic income regarding the foreign income and
variations in the real exchange rate. It was verified that, in the long-run, an increase of 1%
in the exchange rate and in the external income leads respectively to an expansion of 2.04%
and 1.95% in the trade balance. Our empirical findings reveal that the Marshall-Lerner condition holds that, in the long-run, the quantum effects must surpass price effects, increasing the trade balance.
However, in the short-run, the hypothesis of an existence of the J Curve was rejected.