The Effects of Exchange Rate Volatility on Agricultural Trade

I extend Cho, Sheldon, and McCorriston's (2002) analysis of the effect of exchange rate volatility on agricultural trade among the G‐10 countries to a broad sample of developed and developing nations. I replicate their original finding that exchange rate volatility has a large negative impact on agricultural trade between G‐10 members. After controlling for agricultural export subsidies, which are correlated with exchange rate volatility, I show that the original impact declines by half. Using the extended sample, I find that the effect of exchange rate volatility is much larger for developing country exporters than for developed exporters.