Trade Barrier Volatility and Agricultural Price Stabilization

40 Pages Posted: 29 Nov 2010

See all articles by Kym Anderson

Kym Anderson

University of Adelaide - Centre for International Economic Studies (CIES); Centre for Economic Policy Research (CEPR); Australian National University

Signe Nelgen

affiliation not provided to SSRN

Date Written: November 2010

Abstract

National barriers to trade are often varied to insulate domestic markets from international price variability. This paper explores the extent of that behavior by governments using estimates of agricultural price distortions in 75 countries. Newly estimated price transmission elasticities are quite low, albeit slightly higher since than before 1985. In the case of extreme upward price spikes, trade policy responses by food importers are as substantial as those of exporting countries. The domestic price-stabilizing effect of intervention by each group is thereby weakened by the other group’s response, suggesting more-effective domestic policy options need to be considered instead of varying trade barriers.

Keywords: Agricultural trade policies, Commodity price stabilization, Distorted incentives, Domestic market insulation, Price transmission

JEL Classification: F14, Q17, Q18

Suggested Citation

Anderson, Kym and Nelgen, Signe, Trade Barrier Volatility and Agricultural Price Stabilization (November 2010). CEPR Discussion Paper No. DP8102, Available at SSRN: https://ssrn.com/abstract=1714874

Kym Anderson (Contact Author)

University of Adelaide - Centre for International Economic Studies (CIES) ( email )

School of Economics
Adelaide SA 5005
Australia
+61 8 8313 4712 (Phone)
+61 8 8223 1460 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Australian National University ( email )

Arndt-Corden Dept of Economics
Coombs Building
Canberra, AK ACT 2600
Australia
+61 8 8313 4712 (Phone)

HOME PAGE: http://publicpolicy.anu.edu.au/crawford_people/content/staff/acde/kanderson.php

Signe Nelgen

affiliation not provided to SSRN ( email )

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