JAPANESE MONETARY POLICIES AND UNITED-STATES AGRICULTURAL EXPORTS

Accelerated Japanese monetary expansion failed to appreciably influence imports of US crops despite notable increases in the nominal yen/dollar exchange rate, according to COMGEM, a US macroeconomic model that incorporates non-US macroeconomic linkages and an Armington model of foreign demands for US crops. Expansionary monetary policies also led to higher Japanese inflation and raised real national income, offsetting the negative import effects of higher nominal exchange rates. COMGEM simulated three 1986-90 Japanese monetary expansion rates, given unchanged US macroeconomic patterns, to determine the influences of Japanese monetary shocks on imports of US crops. -Authors

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