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Trade exposure and income volatility in cash-crop exporting developing countries

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  • François Bourguignon
  • Sylvie Lambert
  • Akiko suwa-Eisenmann

    ()

Abstract

World commodity price volatility generates an aggregate macroeconomic risk for the many developing countries that are dependent on the export of a few agricultural commodities. Usual income indicators should therefore take into account the corresponding risk premium, especially for households close to subsistence level. A risk-augmented income distribution would yield a very different ranking of the policies often used to alleviate the domestic impact of world price volatility. This paper gives illustrative examples using simulations generated by a general equilibrium model with random prices for cash crops. Results show that policies that are similar in terms of expected average income can have quite different effects in terms of income variances. Copyright 2004, Oxford University Press.
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Suggested Citation

  • François Bourguignon & Sylvie Lambert & Akiko suwa-Eisenmann, 2004. "Trade exposure and income volatility in cash-crop exporting developing countries," Research Unit Working Papers 0408, Laboratoire d'Economie Appliquee, INRA.
  • Handle: RePEc:lea:leawpi:0408
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    File URL: http://www.inra.fr/Internet/Departements/ESR/UR/lea/documents/wp/wp0408.pdf
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    Cited by:

    1. Charles, Michael B. & Ryan, Rachel & Oloruntoba, Richard & Heidt, Tania von der & Ryan, Neal, 2009. "The EU-Africa Energy Partnership: Towards a mutually beneficial renewable transport energy alliance?," Energy Policy, Elsevier, vol. 37(12), pages 5546-5556, December.
    2. Charles, Michael B. & Ryan, Rachel & Ryan, Neal & Oloruntoba, Richard, 2007. "Public policy and biofuels: The way forward?," Energy Policy, Elsevier, vol. 35(11), pages 5737-5746, November.
    3. Antonio Lopolito & Maurizio Prosperi & Roberta Sisto, 2009. "Socio-Economic Implications Of The Development Of A Bio-Refinery: An Analysis With Fuzzy Cognitive Maps," Quaderni DSEMS 19-2009, Dipartimento di Scienze Economiche, Matematiche e Statistiche, Universita' di Foggia.

    More about this item

    Keywords

    risk commodity price volatility; trade and income distribution; computable general equilibrium;

    JEL classification:

    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General
    • D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models

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