Quality, Sourcing, and Asymmetric Exchange-Rate Pass-Through into U.S. Coffee Imports
By: Anders, Sven; Fedoseeva, Svetlana
Anders, Sven; Fedoseeva, Svetlana, Quality, Sourcing, and Asymmetric Exchange-Rate Pass-Through into U.S. Coffee Imports, Journal of Agricultural and Resource Economics, Volume 42, Issue 3, September 2017, Pages 372-385
Few studies to date have investigated the extent of linkages between long-run asymmetries in bilateral trade and fluctuations in real exchange rates and importer demand in non-oil commodity markets. This paper generates estimates of trade elasticities in U.S. raw coffee imports, applying a nonlinear autoregressive distributed lag model and explicitly testing the extent to which nonlinearities matter to U.S. commodity sourcing in the short and long run. Models with asymmetries in both exchange rates and U.S. income point to the critical role that asymmetric pass-through plays in explaining long-run dynamics in U.S. import trade for a major commodity supply chain.