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Rethinking Grain Price Stabilization: The Philippine Case


  • James A. Roumasset

    () (Department of Economics, University of Hawaii at Manoa)


The welfare effects of grain price stabilization depend on the stabilization instrument and the source of instability. If the source is international market price instability, then even an omniscient (perfect forecasting) and omnipotent (zero storage costs) government cannot increase welfare by price stabilization. Stabilization agencies should be downsized and converted to market integration and competitiveness enhancing agencies. In this way, international prices stabilize against domestic disturbances, and the remaining instability is welfare increasing.

Suggested Citation

  • James A. Roumasset, 1993. "Rethinking Grain Price Stabilization: The Philippine Case," Working Papers 199322, University of Hawaii at Manoa, Department of Economics.
  • Handle: RePEc:hai:wpaper:199322

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    Cited by:

    1. Barrera, Carlos, 2010. "¿Respuesta asimétrica de precios domésticos de combustibles ante choques en el WTI?," Working Papers 2010-016, Banco Central de Reserva del Perú.

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