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Market Stabilization and the Reform of the Common Agricultural Policy

Author

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  • Anderson, Ronald W.

Abstract

I solve numerically for stationary rational-expectations equilibria of a two-country, non-linear model of a storable commodity. With constant tariffs, price volatilities in both countries increase with an increase in the tariff rate of one country or with an increase in the storage cost in one country. When one country (`the EC') uses a variable import levy and export subsidy to defend a fixed price floor, increases in the floor (a) increase mean price and decrease price volatility in the EC and (b) decrease mean price, increase volatility and increase private stockholding in the rest of the world. The volatility of farm incomes in the EC are relatively insensitive to increases in the floor.

Suggested Citation

  • Anderson, Ronald W., 1992. "Market Stabilization and the Reform of the Common Agricultural Policy," CEPR Discussion Papers 740, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:740
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    Citations

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    Cited by:

    1. Fabienne Féménia & Alexandre Gohin, 2010. "Faut-il une intervention publique pour stabiliser les marchés agricoles ? Revue des questions non résolues," Review of Agricultural and Environmental Studies - Revue d'Etudes en Agriculture et Environnement, INRA Department of Economics, vol. 91(4), pages 435-456.
    2. Larry Karp & Spiro Stefanou, 1994. "Domestic and trade policy for Central and East European agriculture 1," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 2(3), pages 345-371, September.

    More about this item

    Keywords

    Commodities; Common Agricultural Policy; Stabilization; Storage;

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • Q17 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agriculture in International Trade
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy

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