This paper investigates the international quarterly prices of wheat and rice from 1983(1) to 2012(4). The empirical analysis takes place with the structural time series methodology which decomposes the price series into their trend, cycle, seasonal and irregular components. The empirical results indicate that wheat prices present cyclical behavior while rice prices except for cyclicality are mainly governed by the irregular component. The results strain the importance of treating wheat and rice like two distinct commodities that require country specific and commodity specific policy measures. Finally, the impact of the shrinking Chinese grain stocks after 2002 is proposed as an important factor that resulted in the 2008 price spike.
This study investigates the price transmission mechanisms between the producer and the consumer for three major Greek agricultural products: fresh potatoes, tomatoes and cucumbers. The empirical analysis uses a Markov Switching Vector Error Correction model which accounts for asymmetric responses of the producer and the consumer to price increases and decreases. The asymmetric effects are tested with in-sample as well as out-ofsample measures for each state. The response of the producer and the consumer to long-run deviations from the equilibrium and to lagged price changes is investigated along with the nature of the price shocks for each state. The empirical results show that potatoes and cucumbers give rise to similar price mechanisms even though the underlying characteristics of these two markets are different. Moreover, the empirical analysis shows that tomatoes and cucumbers result in different price relationships between the producer and the consumer despite the similar market characteristics.
This paper investigates the international quarterly prices of wheat and rice from 1983(1) to 2012(4). The empirical analysis takes place with the structural time series methodology which decomposes the price series into their trend, cycle, seasonal and irregular components. The empirical results indicate that wheat prices present cyclical behavior while rice prices except for cyclicality are mainly governed by the irregular component. The results strain the importance of treating wheat and rice like two distinct commodities that require country specific and commodity specific policy measures. Finally, the impact of the shrinking Chinese grain stocks after 2002 is proposed as an important factor that resulted in the 2008 price spike.
This study investigates the price transmission mechanism between the producer and the consumer of the Greek food market while taking into consideration the decoupling policy scheme of the Common Agricultural Policy of the European Union. The empirical analysis uses the panel vector error correction model for the empirical investigation of the price mechanism. The dynamics of the price mechanism are evaluated in the short and long run with causality tests and impulse responses. The results show that the producer does not respond to long-run deviations from the equilibrium. Moreover, a shock in the producer or the consumer prices results in own disequilibrium effects that are quickly decayed and disequilibrium spillover effects from one price level to the other that take time to decay. Finally, the implementation of the decoupling scheme seems to have benefited the consumer more rather than the producer in mitigating his responses to own and cross-price shocks.
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