RELATIVE AGRICULTURAL PRICE CHANGES IN DIFFERENT TIME HORIZONS

Using a monthly data covering from 1974:1 to 2002:12, this paper explores the linkage between changes in macroeconomic variables (real exchange rate and inflation rate) and changes in relative agricultural prices in different time horizons (1, 12, 24, 36, 48, and 60 months). Controlling for factors likely to determine the long run trend of relative agricultural prices, the results show that long-term changes in real exchange rate has had a significant negative correlation with the long-term changes in relative agricultural prices. Conversely, changes of the general price have a role in explaining short-term changes in relative agricultural price at best