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Emergency reserves, private storage, or trade? How to prevent extreme grain prices in a two country setting

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  • Brockhaus, Jan
  • Kalkuhl, Matthias

Abstract

A broad set of trade, private storage, and public reserve related policies to stabilize food prices are analyzed in a two country model with private stockholders and producers featuring rational expectations. Major findings include that trade is a highly efficient and cost free stabilization mechanism. Even if subsidized, private storage hardly manages to avoid extreme price spikes although it is very efficient in reducing the expected volatility in normal times. In contrast, a public emergency reserve can be very useful in compensating large supply shortages at a reasonable level of fiscal costs with minimal side effects.

Suggested Citation

  • Brockhaus, Jan & Kalkuhl, Matthias, 2015. "Emergency reserves, private storage, or trade? How to prevent extreme grain prices in a two country setting," 55th Annual Conference, Giessen, Germany, September 23-25, 2015 209224, German Association of Agricultural Economists (GEWISOLA).
    • Handle: RePEc:ags:gewi15:209224
    DOI: 10.22004/ag.econ.209224
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    File URL: https://ageconsearch.umn.edu/record/209224/files/P1-192-Brockhaus-Emergency_reserves__private_storage__or_trade_How.pdf
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    Cited by:

    1. Brockhaus, Jan & Kalkuhl, Matthias & Kozicka, Marta, 2016. "What Drives India’s Rice Stocks? Empirical Evidence," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 235659, Agricultural and Applied Economics Association.

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