@article{Dushmanitch:267321,
      recid = {267321},
      author = {Dushmanitch, V. Y. and Darroch, M. A. G.},
      title = {AN ECONOMIC ANALYSIS OF THE IMPACTS OF MONETARY POLICY ON  SOUTH AFRICAN AGRICULTURE},
      journal = {Agrekon},
      address = {1990-12},
      number = {346-2018-482},
      year = {1990},
      abstract = {Following world wide trends, closer integration of  agriculture into the macroeconomy has exposed farmers to  the effects of changes in interest rates, exchange rates  and prices that are associated with changes in monetary  policy. In South Africa, farmers are faced with  persistently high innation, nuctuating interest rates and  declining rand exchange rate. A general equilibrium  simultaneous equation model was constructed to analyse the  impacts of monetary policy on South African agriculture.  Annual data (1960-1987) were used to estimate equations  representing the field crop, horticultural, livestock and  manufacturing sectors, and the money and foreign exchange  markets. The interest, innation, and exchange rates were  determined endogenously and key macrolinkages whereby the  impacts of monetary policy are transmitted to agriculture  were simulated. Due to insufficient degrees of freedom, the  model was estimated by two-stage principal components. The  estimated model was used to simulate the dynamic impacts of  an expansionary monetary policy on agriculture. In the  short run. this causes the real interest rate to fall,  exchange rate lo depreciate, and general level of prices to  rise. Depreciation of the exd1ange rate and higher domestic  innation raise input prices. Increased cost effects of  higher input prices outweigh the reduced cost effects of  lower real interest rates causing real field crop and  horticultural supply to decrease. Increased stock effects  of lower real interest rates and increased cost effects of  higher input costs impact negatively on livestock supply.  The resultant decrease in agricultural supply causes  commodity prices to rise which lowers real demand for  agricultural products. The net effect is a decline in real  agricultural income for the sectors modeled.},
      url = {http://ageconsearch.umn.edu/record/267321},
      doi = {https://doi.org/10.22004/ag.econ.267321},
}