Grain Price Spikes and Beggar-Thy-Neighbor Policy Responses: A Global Economywide Analysis

36 Pages Posted: 20 Apr 2016

See all articles by Hans Grinsted Jensen

Hans Grinsted Jensen

European Commission's Joint Research Centre

Kym Anderson

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

Multiple version iconThere are 2 versions of this paper

Date Written: August 1, 2014

Abstract

When prices spike in international grain markets, national governments often reduce the extent to which that spike affects their domestic food markets. Those actions exacerbate the price spike and international welfare transfer associated with the terms of trade change. Several recent analyses have assessed the extent to which those policies contributed to the 2006-08 international price rise, but only by focusing on one commodity or using a back-of-the-envelope method. This paper provides a more comprehensive analysis that uses a global economywide model that is able to take account of the interactions between markets for farm products that are closely related in production or consumption. The model is able to estimate the impacts of those insulating policies on grain prices and on the grain trade and economic welfare of various countries. The results support the conclusion from earlier studies that there is a need for stronger World Trade Organization disciplines on export restrictions.

Keywords: Trade and Multilateral Issues

Suggested Citation

Jensen, Hans Grinsted and Anderson, Kym, Grain Price Spikes and Beggar-Thy-Neighbor Policy Responses: A Global Economywide Analysis (August 1, 2014). World Bank Policy Research Working Paper No. 7007, Available at SSRN: https://ssrn.com/abstract=2483542

Hans Grinsted Jensen

European Commission's Joint Research Centre ( email )

Seville
Spain

Kym Anderson

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

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
42
Abstract Views
444
PlumX Metrics