On the optimal implementation of agricultural policy reforms
AbstractEconomic analyses of farm policies generally focus on long run, steady state impacts while the transition dynamics are often overlooked. In this paper we develop a determinist dynamic computable general equilibrium analysis allowing agents to form adaptive versus perfect expectations. Using an illustrative CAP reform scenario, we simulate an abrupt versus a gradual implementation of this reform. Our results show that if economic agents are able to perfectly anticipate the impacts of the reform, delaying its implementation is never optimal. On the other hand, if agents gradually learn from market developments, we find some cases where a gradual implementation of this reform is welfare improving. Such gradual implementation allows minimizing adjustment costs.
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Bibliographic InfoArticle provided by Elsevier in its journal Journal of Policy Modeling.
Volume (Year): 35 (2013)
Issue (Month): 1 ()
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Web page: http://www.elsevier.com/locate/inca/505735
Dynamics; Europe; Farm policies; Welfare;
Other versions of this item:
- Femenia, Fabienne & Gohin, Alexandre, 2010. "On The Optimal Implementation Of Agricultural Policy Reforms," Proceedings Issues, 2010: Climate Change in World Agriculture: Mitigation, Adaptation, Trade and Food Security, June 2010, Stuttgart- Hohenheim, Germany 91285, International Agricultural Trade Research Consortium.
- Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy
- Q11 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Aggregate Supply and Demand Analysis; Prices
- D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
- D8 - Microeconomics - - Information, Knowledge, and Uncertainty
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