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Abstract
This paper focuses on estimating the effects of trade partner income and real trade-weighted
exchange rates on US agricultural exports. For the period 1970-2003, a one
percent annual increase in trade partners’ income is found to increase total agricultural
exports by about 1.6 percent while a one percent appreciation of the dollar relative to
trade partner trade-weighted currencies decreases total agricultural exports by about 0.8
percent. We find these effects also carry over to 12 commodity subcategories, although
the effects are conditioned by differences between bulk and high value commodities, and
differences in the export demand from high compared to low income countries. We also
find that the negative effect of exchange rate appreciation on exports often dominates the
positive effect from income growth.