@article{Dutton:259748,
      recid = {259748},
      author = {Dutton, John and Grennes, Thomas},
      title = {Measurement of Effective Exchange Rates Appropriate for  Agricultural Trade},
      address = {1985-11-01},
      number = {1908-2017-2094},
      pages = {76},
      year = {1985},
      abstract = {The paper is concerned with the effect of an exchange rate  variation on agricultural trade. Most related literature  has dealt with specification of economic models and  empirical estimation of model parameters. In contrast, this  paper concentrates on the appropriate measurement of  multilateral exchange rate changes for the analysis of  agricultural trade. Literature on the economic theory of  index numbers was reviewed for guidance in constructing  effective exchange rate indices. Major existing exchange  rate indices were compared including those of the Federal  Reserve Board, International Monetary Fund, Morgan Guaranty  Trust, and the U.S. Department of Agriculture. New indices  were constructed based on" alternative weighting schemes  and index forms. In general, measurement differences among  indices were not negligible and for certain periods,  discrepancies were substantial. Of all the indices  considered, the USDA's real trade-weighted dollar showed  less appreciation of the dollar since 1980 than any of the  other indices based on total trade or. agricultural trade.  This raises the question of whether the USDA index  understates the importance of exchange rates when large  changes occur. The significance of the results is  illustrated in terms of an agricultural trade model. It  appears that proper measurement of the exchange rate  variable may be as important as accurate measurement of  parameters of the model.},
      url = {http://ageconsearch.umn.edu/record/259748},
      doi = {https://doi.org/10.22004/ag.econ.259748},
}