The impact of world price instability on agricultural supply according to several macroeconomic factors
AbstractThis paper aims at analyzing the effect of world price instability on the aggregate agricultural supply of developing countries and determining to what extent this effect depends on the macroeconomic environment. Producers of agricultural commodity-exporting countries are particularly vulnerable to the fluctuations of world prices : they are exposed to price shocks and their ability to cope with them is weak. But the effectiveness of risk coping strategies is conditional on the influence of macroeconomic factors. We test the impact of international price instability on the aggregate agricultural supply, taking account of some features of the national environment (infrastructure, inflation, and financial deepening). The analysis is based on a sample of 25 countries during the period 1961-2002. Results from panel data highlight a significant negative effect of international price instability on aggregate agricultural supply. Moreover, they show that high inflation, weak infrastructure and poorly developed financial system contribute to reinforce this effect.
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Bibliographic InfoPaper provided by CERDI in its series Working Papers with number 200604.
Date of creation: 2006
Date of revision:
aggregate supply; price instability; inflation; infrastructure; financial deepening;
Other versions of this item:
- Julie Subervie, 2011. "The impact of world price instability on agricultural supply according to several macroeconomic factors," Working Papers halshs-00564577, HAL.
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- Kangni KPODAR & Sylviane GUILLAUMONT JEANNENEY, 2006.
"Financial Development, Financial Instability and Poverty,"
- Sylviane GUILLAUMONT JEANNENEY & Kangni KPODAR, 2004. "Développement financier, instabilité financière et réduction de la pauvreté," Working Papers 200429, CERDI.
- Sylviane Guillaumont Jeanneney & Kangni Kpodar, 2005. "Financial Development, Financial Instability and Poverty," CSAE Working Paper Series 2005-09, Centre for the Study of African Economies, University of Oxford.
- Sylviane Guillaumont Jeanneney & Kangni Kpodar, 2008. "Financial Development and Poverty Reduction: Can There Be a Benefit Without a Cost?," IMF Working Papers 08/62, International Monetary Fund.
- Sylviane Guillaumont Jeanneney & Kangni Kpodar, 2011. "Financial Development, Financial Instability and Poverty," Working Papers halshs-00564573, HAL.
- Sylviane Guillaumont Jeanneney & Kangni Kpodar, 2005. "Financial Development, Financial Instability and Poverty," Economics Series Working Papers WPS/2005-09, University of Oxford, Department of Economics.
- Guillaumont, Patrick, 2008. "An Economic Vulnerability Index: Its Design and Use for International Development Policy," Working Paper Series RP2008/99, World Institute for Development Economic Research (UNU-WIDER).
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