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Analyzing Collective Trade Policy Actions in Response to Cyclical Risk in Agricultural Production: The Case of International Wheat

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  • Lee, Youngjae
  • Kennedy, Lynn

Abstract

This study shows how cyclical risk and collective trade policy actions can cumulatively worsen international food price spikes. By using spatial Computable General Equilibrium (CGE) and Eaton and Kortum’s trade model, this study offers the following conclusions. At first, the cyclical shock in agricultural production might cause agricultural and food price spikes in the international agricultural and food markets. Second, export restrictions and import responses can worsen food price spikes and disrupt trade flows in international agricultural and food markets. Finally, the effect of these collective trade policy actions and resulting food price spikes in international agricultural and food markets do not dissipate even after agricultural production has recovered.

Suggested Citation

  • Lee, Youngjae & Kennedy, Lynn, 2016. "Analyzing Collective Trade Policy Actions in Response to Cyclical Risk in Agricultural Production: The Case of International Wheat," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 235430, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaea16:235430
    DOI: 10.22004/ag.econ.235430
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    File URL: https://ageconsearch.umn.edu/record/235430/files/Collective%20Trade%20Policy%20Actions.pdf
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    References listed on IDEAS

    as
    1. Kulyk, Iryna & Herzfeld, Thomas, 2015. "Impediments to wheat export from Ukraine," 2015 International European Forum (144th EAAE Seminar), February 9-13, 2015, Innsbruck-Igls, Austria 206218, International European Forum on System Dynamics and Innovation in Food Networks.
    2. Yu, T. Edward & Tokgoz, Simla & Wailes, Eric & Chavez, Eddie C., 2017. "A quantitative analysis of trade policy responses to higher world agricultural commodity prices:," IFPRI book chapters, in: Bouët, Antoine & Laborde Debucquet, David (ed.),Agriculture, development, and the global trading system: 2000– 2015, chapter 11, International Food Policy Research Institute (IFPRI).
    3. Will Martin & Kym Anderson, 2012. "Export Restrictions and Price Insulation During Commodity Price Booms," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 94(2), pages 422-427.
    4. Tanaka, Tetsuji & Hosoe, Nobuhiro, 2011. "Does agricultural trade liberalization increase risks of supply-side uncertainty?: Effects of productivity shocks and export restrictions on welfare and food supply in Japan," Food Policy, Elsevier, vol. 36(3), pages 368-377, June.
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    More about this item

    Keywords

    Agribusiness; Agricultural and Food Policy; Demand and Price Analysis; International Relations/Trade; Productivity Analysis;

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