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Export Restrictions And Multiple Spatial Price Equilibria When International Prices Spike: Export Quotas For Wheat In Ukraine

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  • Gotz, Linde
  • Qiu, Feng
  • Gervais, Jean-Philippe
  • Glauben, Thomas

Abstract

Only few models exist which allow for a regime-dependent spatial price equilibrium. This paper focuses on the price insulating effects of export restrictions. The theory of a Walrasian equilibrium and the spatial price equilibrium theory suggest that export restrictions lead to multiple spatial equilibria between the domestic and the world market price. Our analysis is unique in testing for linear versus non-linear cointegration within a smooth transition cointegration model. The application to the wheat export quota in Ukraine shows that the domestic wheat price was stabilized about 30% below the international wheat price during the two recent price booms. We trace back the increased speed of adjustment in the closed trade regime to increased price information flows and heightened information attention when prices are volatile and high. From a global point of view, the domestic wheat price in Ukraine would have increased to the same degree, if no country had engaged in price insulating behaviour 2006-2008 worldwide.

Suggested Citation

  • Gotz, Linde & Qiu, Feng & Gervais, Jean-Philippe & Glauben, Thomas, 2012. "Export Restrictions And Multiple Spatial Price Equilibria When International Prices Spike: Export Quotas For Wheat In Ukraine," 2012: New Rules of Trade? December 2012, San Diego, California 143179, International Agricultural Trade Research Consortium.
  • Handle: RePEc:ags:iat12m:143179
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    References listed on IDEAS

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    Cited by:

    1. Götz, Linde & Goychuk, Kateryna & Glauben, Thomas & Meyers, William H., 2013. "Export Restrictions and Market Uncertainty: Evidence from the Analysis of Price Volatility in the Ukrainian Wheat Market," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 150308, Agricultural and Applied Economics Association.
    2. Diao, Xinshen & Kennedy, Adam & Mabiso, Athur & Pradesha, Angga, 2013. "Economywide impact of maize export bans on agricultural growth and household welfare in Tanzania: A Dynamic Computable General Equilibrium Model Analysis:," IFPRI discussion papers 1287, International Food Policy Research Institute (IFPRI).

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