Monetary Announcement and Agricultural Product Price Dynamics under Fixed Exchange Rates
Resource
經濟論文叢刊, 30(3), 313-333
Journal
經濟論文叢刊
Journal Volume
30
Journal Issue
3
Pages
313-333
Date Issued
2002-09
Date
2002-09
Author(s)
Wang
Lai, Ching-C.C.
Hu, W.W.
Abstract
Most, if not all, of the existing theore-tical studies dealing with the linkage between macroeconomic variables and agricultural product prices are concerned with closed economies. This paper instead constructs an open-economy model under fixed exchange rates. The model we set up includes the agricultural market, the non-agricultural market, the money market, and the foreign exchange market. Based on this open-economy model, we study the characteristics agricultural product prices will exhibit when the monetary authorities engage in a pre-announced monetary policy. Two main conclusions emerge from the analysis. Firstly, the expansion of domestic credit will not affect agricultural product prices, but induce the level of foreign exchange reserves decrease to the same extent as domestic credit. Secondly, agricultural product prices rise process during the period following the announcement but prior to the monetary expansion, while they decline after policy implementation.
Subjects
農產品價格
政策宣告
貨幣政策
動態調整
agricultural product prices
policy announcement
monetary policy
dynamic adjustment
Type
journal article