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Market Interventions, International Price Stabilization, and Welfare Implications
Author(s) -
Devadoss S.
Publication year - 1992
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 - 10.2307/1242482
Subject(s) - economics , welfare , buffer stock scheme , international economics , monetary economics , international trade , microeconomics , market economy
The welfare effects of price stabilization are quantified under free trade and under distortionary policies when an exporting country protects domestic producers with price supports, an importing country pursues a price‐fixing policy, and a second importing country follows a free trade policy. Results show that distortionary interventions cause greater world price variability. World gains from international price stabilization through a costless buffer stock scheme are higher under distortionary trade than under free trade.