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The EEC's Wheat Price Policies and International Trade in Differentiated Products
Author(s) -
Gorter Harry,
Meilke Karl D.
Publication year - 1987
Publication title -
american journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.949
H-Index - 111
eISSN - 1467-8276
pISSN - 0002-9092
DOI - 10.2307/1242272
Subject(s) - economics , consumption (sociology) , imperfect , international economics , commercial policy , international trade , agricultural economics , monetary economics , social science , linguistics , philosophy , sociology
Several features of the EC wheat market are analyzed including the imperfect substitutability between imports and domestic supplies, the simultaneous import and export of wheat, and the distinct impact of threshold versus intervention policy prices. In theory, the impact of EC price policies on wheat consumption and net trade are found to be indeterminate a priori. Empirical results show that intervention prices have a positive impact on EC net exports, while increases in threshold (import) prices have decreased EC net wheat exports. Competing wheat exporters would prefer the EC to lower the intervention price to world levels but maintain threshold prices.