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The impact of removing corn subsidies in mexico: A general equilibrium assessment

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  • K. Doroodian
  • Roy Boyd

Abstract

This paper evaluates the impact of removing corn subsidies on the Mexican economy. More specifically, this paper employs a computable general equilibrium model of Mexico. The model will first simulate the economy's activity under the present conditions. Next, a simulation is conducted under the assumption that the present corn subsidies are reduced. The results are quite revealing. They indicate that while all income classes are initially made worse off, there is an increase in government income. These transfer payments could be targeted to displaced workers as well as the working poor who face inflationary pressures due to rising food costs. These findings also indicate that a decrease in subsidy levels will lead to a marked increase in saving and, consequently, economic investment. Copyright International Atlantic Economic Society 1999

Suggested Citation

  • K. Doroodian & Roy Boyd, 1999. "The impact of removing corn subsidies in mexico: A general equilibrium assessment," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 27(2), pages 150-169, June.
  • Handle: RePEc:kap:atlecj:v:27:y:1999:i:2:p:150-169
    DOI: 10.1007/BF02300235
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    File URL: http://hdl.handle.net/10.1007/BF02300235
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    References listed on IDEAS

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    1. N/A, 1985. "General Policy," India Quarterly: A Journal of International Affairs, , vol. 41(1), pages 74-79, January.
    2. Ballard, Charles L. & Fullerton, Don & Shoven, John B. & Whalley, John, 2009. "A General Equilibrium Model for Tax Policy Evaluation," National Bureau of Economic Research Books, University of Chicago Press, edition 0, number 9780226036335, December.
    3. Barbier, Edward B. & Burgess, J.C., 1996. "Economic analysis of deforestation in Mexico," MPRA Paper 12089, University Library of Munich, Germany.
    4. N/A, 1985. "General Policy," India Quarterly: A Journal of International Affairs, , vol. 41(1), pages 112-117, January.
    5. Levy, Santiago & van Wijnbergen, Sweder, 1992. "Maize and the Free Trade Agreement between Mexico and the United States," World Bank Economic Review, World Bank Group, vol. 6(3), pages 481-502, September.
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    Cited by:

    1. Cassey, Andrew J. & Galinato, Suzette P. & Taylor, Justin L., 2012. "Environmental Regulation and Regional Economy: Economic Impacts of the Elimination of Azinphos-methyl on the Apple Industry and Washington State," Journal of Food Distribution Research, Food Distribution Research Society, vol. 43(2), July.

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