Can markets support trade ? : the case of sugar
A model of the world sugar industry shows that sugar prices are naturally chaotic. As a consequence, and contrary to the conventional creed, liberalisation, instead of damping fluctuations out, is likely to increase them. But since decision makers are risk averse, and restrain production when faced with uncertain prices, the average price level without is significantly lower than with liberalisation, thus jeopardising the benefits of a more efficient use of resources due to comparative advantage. The policy implication is that care should be taken not to create undesired situations for the right purpose of a better division of labour between nations.
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| Main Authors: | , |
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| Format: | conference_item biblioteca |
| Language: | eng |
| Published: |
s.n.
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| Subjects: | E71 - Commerce international, modèle, prix de marché, marché des produits de base, sucre, libéralisation des échanges, secteur agroindustriel, http://aims.fao.org/aos/agrovoc/c_4881, http://aims.fao.org/aos/agrovoc/c_28728, http://aims.fao.org/aos/agrovoc/c_1781, http://aims.fao.org/aos/agrovoc/c_7498, http://aims.fao.org/aos/agrovoc/c_7853, http://aims.fao.org/aos/agrovoc/c_208, |
| Online Access: | http://agritrop.cirad.fr/507421/ http://agritrop.cirad.fr/507421/1/document_507421.pdf |
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| Summary: | A model of the world sugar industry shows that sugar prices are naturally chaotic. As a consequence, and contrary to the conventional creed, liberalisation, instead of damping fluctuations out, is likely to increase them. But since decision makers are risk averse, and restrain production when faced with uncertain prices, the average price level without is significantly lower than with liberalisation, thus jeopardising the benefits of a more efficient use of resources due to comparative advantage. The policy implication is that care should be taken not to create undesired situations for the right purpose of a better division of labour between nations. |
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