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Abstract

The objective of this paper is to analyze the 1999 exchange rate (real/dollar) devaluation impact on coffee and intermediate input prices. Input price increased with exchange rate devaluation, reducing the positive effect of the exchange rate on coffee production, compared with the scenario which did not take the impact on input price into account. Coffee supply increased by 19.75% when the exchange rate devaluation impact on input price was not considered and by 17. 69 % when the devaluation impact on the price of fertilizers and machinery was considered.

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