In this paper, the macroeconomic dynamic model of small and open sectors has been applied to probe the effects of the government’s agricultural product purchase policy and subsidy policy on the price of agricultural products and exchange rate (or the price of manufacturing products). The results of the research indicate as follows: 1) the price of agricultural products will rise in the long run if the government adopts the purchase policy; yet the price of agricultural products may rise and fall if the subsidy policy is adopted, which depends on the "degree of capital mobility" and the "price effect" of the agricultural products, 2) regardless of the government’s purchase or subsidy policies, the impact on the long-term equilibrium values of the exchange rate is uncertain, and it must depend on the relative size of the "degree of capital mobility", 3) the prices of agricultural products may undergo under shooting adjustments and misadjustment in the short-term if the government announces an increase in the purchases quantities of agricultural products; and furthermore, exchanges rates will only show undershooting adjustments. These conclusions may explain some impulse response results, and 4) there will be undershooting or overshooting in the prices of agricultural products if the government announces an increase in subsidies for agricultural product prices, and the exchange rate may consequently be undershooting or misadjustment. These analyses can explain some impulse response results.
本站僅提供期刊文獻檢索。
