| This dissertation consists of three empirical studies on three important yet controversial issues in international economics. The three issues are: the causal relationship between exports and development, the effects of exchange rate volatility on trade flows, and the validity of long-run purchasing power parity. The research object is the United States, involving its country-level trade, agricultural industry trade, and the trade of an important agricultural commodity of wheat. The research motivation is due to the fact that ambiguity of theoretical predictions reinforces the importance of investigating the issues empirically. The essential goal is applying advanced estimation techniques, recent econometric development in time series in particular, to examine these controversial issues more appropriately.; The first essay investigates the causal relationship between exports and production of three major wheat exporters: Australia, Canada, and the United States, in the context of a multivariable framework. Granger-causality tests, variance decompositions, and impulse response functions are used to investigate the nature and magnitude of the causal relationship. Results indicate that exports and production reinforce each other for wheat industry of U.S. and Canada while unidirectional causality from exports to production is found for Australia wheat industry.; The second essay uses VAR models to investigate the impacts of real exchange rate volatility on (1) U.S. bilateral exports to Australia, Canada, France, Germany, Italy, Japan, Netherlands, and the United Kingdom; (2) U.S. multilateral trade; and (3) U.S. agricultural trade, over the current floating rate period. The major results suggest that the dynamic relationship between trade and volatility is quantitatively small compared to other variables in the model and the effect of real exchange rate volatility on U.S. exports is weak.; The third essay tests long-run purchasing power parity hypothesis in major U.S. agricultural trading partners, using univariate unit root and panel data unit root tests on real exchange rates and cointegration tests on nominal exchange rate and relative prices. The univariate unit root tests and cointegration tests fail to find evidence to support the hypothesis. Panel data unit root tests show evidence to support long run purchasing power parity hypothesis and indicate that the hypothesis is more likely to hold for developed economies. |
