Removing Distortions in the U.S. Ethanol Market: What Does it Imply for the United States and Brazil?

Posted: 3 Sep 2008

See all articles by Amani Elobeid

Amani Elobeid

Iowa State University - Center for Agriculture and Rural Development (CARD)

Simla Tokgoz

affiliation not provided to SSRN

Date Written: 2008-02

Abstract

We analyze the impact of trade liberalization and removal of the federal tax credit in the United States on ethanol markets using a multimarket international ethanol model. We find that U.S. trade barriers have been effective in protecting the ethanol industry. Under current policy, there is separability of the U.S. ethanol market from world markets. With trade liberalization, the ethanol market deepens, making it less susceptible to price volatility. The effect of trade liberalization extends beyond ethanol markets, affecting agricultural markets. The results show that the impact of removal of the tax credit overrides the impact of the tariff removal.

Suggested Citation

Elobeid, Amani and Tokgoz, Simla, Removing Distortions in the U.S. Ethanol Market: What Does it Imply for the United States and Brazil? (2008-02). American Journal of Agricultural Economics, Vol. 90, No. 4, pp. 918-932, November 2008, Available at SSRN: https://ssrn.com/abstract=1263056 or http://dx.doi.org/10.1111/j.1467-8276.2008.01158.x

Amani Elobeid (Contact Author)

Iowa State University - Center for Agriculture and Rural Development (CARD) ( email )

Ames, IA 50011
United States
(515) 294-6175 (Phone)

HOME PAGE: http://www.card.iastate.edu/facstaff/profile.aspx?id=4

Simla Tokgoz

affiliation not provided to SSRN

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