Instability of Primary Product Prices: A Protest and a Proposal

Caine, Sydney

doi:10.2307/2227769

Cited by 11 publications

(8 citation statements)

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“…Although the argument that volatility reduced investment and subsequently led to lower rates of growth in commodity-dependent countries was appealing, economists found only weak empirical evidence of a direct link. Using data on Malaysian rubber plantations, Caine (1954) challenged the negative link between revenue instability and investment. Later, MacBean (1966) also challenged the findings using crosscountry data, as did Knudsen and Parnes (1975).…”

Section: Challenges To Stabilization Approachesmentioning

confidence: 99%

Policies on Managing Risk in Agricultural Markets

Larson¹

2004

The World Bank Research Observer

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Over the past dozen years, policymakers have largely abandoned long-standing popular approaches for addressing risk in agriculture without fully resolving the question of how best to manage the negative consequences of volatile agricultural markets. The article reviews the transition from past policies and describes current approaches that distinguish between the trade-related fiscal consequences of commodity market volatility and the consequences of price and production risks for vulnerable rural households and communities. Current policies rely more heavily on markets, even though markets for risk are incomplete in numerous ways. The benefits and limitations of market-based instruments are examined in the context of risk management strategies, and innovative approaches to extend the reach of risk markets are discussed.For decades governments have intervened to reduce risk in markets for internationally traded commodities. Over the past dozen years, however, many of the policies and supporting institutions used for that purpose were reevaluated and found to be not only ineffective and unsustainable but impediments to growth. Most of these approaches have now been abandoned, but governments and policymakers still seek to understand how best to manage the negative consequences of volatile commodity markets because traded commodities remain an important source of export earnings for many developing economies and an important component of income and consumption for the poor.This article reviews the historical relationship between the work of applied economists and policymakers and the commodity and risk market instruments introduced in the 1980s. It explores how a growing body of analytical work contributed to a change in thinking that moved the emphasis of policy from stabilization to management of risks, and it surveys current thinking on managing rural risks.

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Section: Challenges To Stabilization Approachesmentioning

confidence: 99%

Policies on Managing Risk in Agricultural Markets

Larson¹

2004

The World Bank Research Observer

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“…MacBean's work confirmed the suspicions of people such as Caine (1954Caine ( , 1958Caine ( , 1966 and Hirschman (1959) who recognized that the problem might require action in some cases, but that it need not necessarily be inimical to growth and welfare. On the contrary, instability might be positively associated with growth if investors prefer fluctuating returns with high stakes, and consumers and governments provide for fluctuations through some form of 'permanent' income behaviour or forward markets.…”

Section: The Early Debatementioning

confidence: 70%

The Consequences of Export Instability for Developing Countries — A Reappraisal

Wilson¹

1983

Development and Change

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“…This orthodoxy did not go unchallenged, however. A more optimistic minority view emerged which suggested that export instability might exert a number of positive influences on investment (see Caine [1954], Hirschman, [1959] and Michaely [1962]. 2.…”

Section: Discussionmentioning

confidence: 99%

Export instability, imports and investment in developing countries

Love

1989

Journal of Development Studies

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Instability of Primary Product Prices: A Protest and a Proposal

Cited by 11 publications

References 0 publications

Policies on Managing Risk in Agricultural Markets

Policies on Managing Risk in Agricultural Markets

The Consequences of Export Instability for Developing Countries — A Reappraisal

Export instability, imports and investment in developing countries

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