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Interregional price linkages of fossil-energy and food sectors: evidence from an international input–output analysis using the GTAP database

Author

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  • Tatsuki Ueda

    (National Agriculture and Food Research Organization)

  • Yoji Kunimitsu

    (National Agriculture and Food Research Organization)

Abstract

This study examined the impacts of price changes in fossil-energy resources on food prices across the world. We approached this issue with the input–output (IO) price model, which is suitable for evaluating the price effects due to cost-push (supply driven) processes through transaction linkages of intermediate goods. We employ an international interregional IO table comprising 14 regions and 57 industrial sectors, which is compiled from the global trade analysis project (GTAP) 9 database. The results revealed: (1) interregional price linkages are particularly strong between a wheat-producing region and energy producers in the adjacent regions; and (2) the world oil sector appears to exert the strongest effects on mechanized sectors (wheat, plant fibers and fishing) and regions practicing advanced agriculture (East Asia, the US, and Russia). Furthermore, a comparison with empirical observations suggests that approximately one tenth of observed 2-year price changes in US wheat in 2004–2016 can be explained by the cost-push processes derived from the world oil price changes.

Suggested Citation

  • Tatsuki Ueda & Yoji Kunimitsu, 2020. "Interregional price linkages of fossil-energy and food sectors: evidence from an international input–output analysis using the GTAP database," Asia-Pacific Journal of Regional Science, Springer, vol. 4(1), pages 55-72, February.
    • Handle: RePEc:spr:apjors:v:4:y:2020:i:1:d:10.1007_s41685-019-00124-9
    DOI: 10.1007/s41685-019-00124-9
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    References listed on IDEAS

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    Cited by:

    1. Yoji Kunimitsu & Gen Sakurai & Toshichika Iizumi, 2020. "Systemic Risk in Global Agricultural Markets and Trade Liberalization under Climate Change: Synchronized Crop-Yield Change and Agricultural Price Volatility," Sustainability, MDPI, vol. 12(24), pages 1-17, December.

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    More about this item

    Keywords

    Food price; GTAP database; International trade; Input–output price model; Oil price;
    All these keywords.

    JEL classification:

    • C67 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Input-Output Models
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • Q11 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Aggregate Supply and Demand Analysis; Prices
    • Q31 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Demand and Supply; Prices
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices

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