Dynamic Elasticities of the Trade Balance of Brazilian Agriculture in Relation to the Exchange Rate

This work examines the elasticities of the Brazilian agricultural trade balance in a dynamic, or non-linear, perspective since emerging economies such as Brazil are quite susceptible to internal and external shocks that can produce asymmetries in these elasticities. To this end, data from January 2000 to July 2019 are used, along with a time-varying cointegration analysis. The results suggest that the elasticities of the net exports in relation to the real exchange rate and foreign income were positive and elastic in practically the entire period considered. Domestic income had a negative influence, but with inelastic impacts and less variability.