A Determination of the Linkages between Agricultural Exports and Economic Growth in the U.S.

A Determination of the Linkages between Agricultural Exports and Economic Growth in the U.S.

This paper attempts to analyze the relationship between major agricultural exports and economic growth in the U.S. economy. Using the annual data from 1961 to 2005, the static model utilizes the export led growth (ELG) hypothesis based on economic growth and major agricultural exports. In addition, in order to investigate the causal relationships, this paper adopts the dynamic models with respect to Impulse Response Function (IRF), Forecast Error Variation Decomposition (FEVD) and Granger causality tests based on the vector error correction model (VECM). The main findings of this paper point out the causal relationship between major agricultural exports and economic growth in the U.S. economy and support the ELG hypothesis in the cases of soybean, rice, cotton, and com exports. Therefore, the U.S. economy exists the evidence of ELG hypothesis, especially agricultural exports on economic growth, and the main importers of U.S. agricultural products are prepared for the increasing of U.S. agricultural exports.