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Policy Bias and Agriculture: Partial and General Equilibrium Measures

  • Bautista, Romeo M, et al

The paper examines the impact of industrial protection, agricultural export taxes, and overvaluation of the exchange rate on the balance between the agricultural and nonagricultural sectors. Various agricultural terms-of-trade indices are constructed to measure the policy bias against agriculture in a computable general equilibrium (CGE) framework and compare the results with earlier partial equilibrium measures. Our results indicate that the partial equilibrium measures miss much of the action operating through indirect product and factor market linkages, while overstating the strength of the linkages between changes in the exchange rate and prices of traded goods on the agricultural terms of trade. Copyright 2001 by Blackwell Publishing Ltd

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Article provided by Wiley Blackwell in its journal Review of Development Economics.

Volume (Year): 5 (2001)
Issue (Month): 1 (February)
Pages: 89-104

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Handle: RePEc:bla:rdevec:v:5:y:2001:i:1:p:89-104
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  1. Bautista, Romeo M., 1987. "Production incentives in Philippine agriculture: effects of trade and exchange rate policies," Research reports 59, International Food Policy Research Institute (IFPRI).
  2. de Melo, Jaime & Robinson, Sherman, 1981. "Trade Policy and Resource Allocation in the Presence of Product Differentiation," The Review of Economics and Statistics, MIT Press, vol. 63(2), pages 169-77, May.
  3. Ceglowski, Janet, 1994. "The Law of One Price Revisited: New Evidence on the Behavior of International Prices," Economic Inquiry, Western Economic Association International, vol. 32(3), pages 407-18, July.
  4. Krueger, Anne O & Schiff, Maurice & Valdes, Alberto, 1988. "Agricultural Incentives in Developing Countries: Measuring the Effect of Sectoral and Economywide Policies," World Bank Economic Review, World Bank Group, vol. 2(3), pages 255-71, September.
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