A New Look at the Emergence of an Agro-Energy Nexus: A Graphical Causal Approach

Dae-Heum Kwon, Jungho Baek, Won W Koo


This study examines causal mechanisms linking exchange rates and prices of oil and ethanol to the 2006-08 price surge in corn, soybeans and wheat, as well as identifies the relative importance of the selected factors to the price spikes using the graphical causal method and forecast error variance decomposition (FEVD). Results suggest that the interactions among the crop prices are more important than other causal factors in explaining the price hikes. We also find that significant growth in the use of corn for biofuel production and hence increased corn prices play dominant roles in price setting among the major crops.

Full Text:


DOI: https://doi.org/10.5296/ber.v2i2.2154


  • There are currently no refbacks.

Copyright (c) 2012 Dae-Heum Kwon, Jungho Baek, Won W Koo

Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 International License.

Business and Economic Research  ISSN 2162-4860

Copyright © Macrothink Institute

To make sure that you can receive messages from us, please add the 'macrothink.org' domain to your e-mail 'safe list'. If you do not receive e-mail in your 'inbox', check your 'bulk mail' or 'junk mail' folders.