1 Short and Long-run Effects of Macroeconomic Variables on the Spanish Agricultural Sector

In this paper, the effect of some relevant macroeconomic variables on Spanish agricultural prices and exports is analysed. The methodological approach used is based on the cointegration procedure making the distinction between short- and long-run effects possible. A eight variables system in real terms is specified. Long-run analysis indicates that money income neutrality as well as agricultural prices homogeneity hold. Short-run dynamics has been analysed by specifying a Structural Vector Error Correction Model. Main results indicate that, in general terms, agricultural variables do not significantly affect macroeconomic variables. In the very short run farmers will benefit from increases of money and general prices while over longer horizons the agricultural terms of trade get worse