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Abstract
Prices of grains and other storable commodities are characterized by long periods in the doldrums punctuated by short but intense price spikes (Deaton and Laroque, 1992). Those spikes are of concern, not least because they can have large impacts on poverty in developing countries (Ivanic and Martin, 2008). Accounts of the food price spikes of 1973–74, 2006–08, and 2010–11 include discussion of a wide range of contributing factors such as exogenous shocks to supply or demand, below-trend stock levels, speculative behavior, and trade policy responses to the shock. Johnson (1975) emphasized policy responses in his analysis of the 1973–74 price spike, as have most of the available assessments of the 2006–08 shock (Robles, Torero, and von Braun, 2009; Baffes and Haniotis, 2010; Bouët and Laborde, 2010; Hochman and others, 2010; Timmer, 2010). Several suggest that export restrictions (and possibly also import subsidies) played an important role in these price spikes, just as intensified export subsidies and triggered import restrictions played a significant role in 1986–88 when international food prices slumped. However, we are unaware of any attempts to quantify the aggregate contribution across countries of trade policy responses to international price surges.
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