Dallas S. Batten and Michael T. Belongia attempt to separate fact from fiction in the debate over monetary policy’s role in determining the value of the dollar and the effect of exchange rate movements on the volume of U.S. agricultural exports. Batten and Belongia first draw distinctions between nominal and real changes in the exchange rate and conclude that monetary policy causes nominal changes in the value of the dollar whereas real changes—associated primarily with nonmonetary factors—are the exchange rate movements that affect trade flows. The authors examine data on real exchange rate changes and agricultural exports from several perspectives and conclude that the exchange rate has been only one factor in the recent export decline. Their analysis finds that foreign real income, depressed by the recent world recession, has also been a primary reason for the lower volume of U.S. agricultural exports.