How does trade policy uncertainty affect agriculture commodity prices?

By Ting Sun, Chiwei Su, Nawazish Mirza, Muhammad Umar. Pacific-Basin Finance Journal, 2021

120 citations recorded by the source corpus.

The present paper explores the impact of trade policy uncertainty (TPU) on agricultural commodity prices (ACP) by employing bootstrap full- and subsample rolling-window Granger causality tests We find that TPU has both positive and negative effects on ACP, suggesting that TPU may change the supply of and demand for agricultural commodities, leading to fluctuations in ACP These results support the hypotheses derived from the general equilibrium model, which highlights that TPU can significantly affect ACP In turn, we find a positive impact of ACP on TPU, indicating that the agricultural commodity market reflects trade conditions in advance In the context of Sino-U S trade frictions and the COVID-19 pandemic, the interaction between TPU and ACP can provide insights for governments to prevent large fluctuations in agricultural commodity markets and stabilize the national economy © 2021 Elsevier B V

Subfields: Economics and Econometrics

View Paper: https://www.semanticscholar.org/paper/6a531a481b2b60e10d3eee567677c7af29015cf0