Export and production growth: evidence from three major wheat exporters of Australia, Canada and the United States

This article investigates the robustness of the relationship between export and production growth for three major wheat exporters: Australia, Canada and the United States from 1966 to 2000. Combining production, international trade and development theories, a four variable (production, exports, producer price and imports) vector autoregressive moving average (VARMA) model is developed for each country. The causality results show that the hypothesis of export-led development is supported by these three major players in the international wheat trade, though a bi-directional causality is found for Canada and the USA. Variance decomposition and impulse response functions are employed to further investigate the effects of macroeconomic shocks.