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The Impact Of Biofuel Policies On Overshooting Of Agricultural Prices, Mahdi Asgari
The Impact Of Biofuel Policies On Overshooting Of Agricultural Prices, Mahdi Asgari
Theses and Dissertations--Agricultural Economics
The Federal Reserve has increased nominal interest rates since early 2016. It is expected that commodity prices will drop in response to this monetary intervention. The overshooting hypothesis explains that commodity prices are more flexible than manufacturing prices and therefore are more volatile. In this situation, it is expected that agricultural commodities decline significantly (i.e., overshoot) and gradually return to their long-run equilibrium. This adjustment behavior has implications for income stability and financial viability of farmers.
This research contributes to the overshooting literature by including the energy sector in the overshooting model. The interlinks between energy and other sectors in …