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Trade Barrier Volatility and Agricultural Price Stabilization

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  • Anderson, Kym
  • Nelgen, Signe

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.

Suggested Citation

  • Anderson, Kym & Nelgen, Signe, 2010. "Trade Barrier Volatility and Agricultural Price Stabilization," CEPR Discussion Papers 8102, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:8102
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Agricultural trade policies; Commodity price stabilization; Distorted incentives; Domestic market insulation; Price transmission;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • Q17 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agriculture in International Trade
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy; Animal Welfare Policy

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