Discussion: Revisiting Macroeconomic Linkages to Agriculture: The Impact of Macroeconomic Variables and the Oil Sector on Farm Prices and Income

Periodically, events occur in the domestic and global economies that remind agriculturaleconomists that macroeconomics matter. This was evident in the early 1980s when theFederal Reserve responded to double-digit inflation by driving interest rates to post–World War II period highs. The Asian financial crisis in the late 1990s, rising oil prices this past decade, and current stress in domestic and overseas financial markets serve to remind us again that externalities can have an effect on the economic performance and financialstrength of U.S. agriculture. These effects are transmitted through interest rates, inflation, unemployment, real gross domestic product, and exchange rates.