Apr 4, 2008

Rodrik, the World Bank and rising food prices

Here is a nice note on the problems associated with today's situation in world trade, from Rodrik's blog. Apart from being about a topic that I am interested in, it shows nicely the (ab-)use of economics.

4 comments:

Cam said...
This comment has been removed by the author.
Cam said...

That's a very interesting article from Rodrik. The last paragraph of the article, concerning the heterogeneous effects of rising food prices, reminds me of an article from The Economist last week:

http://www.economist.com/world/international/
displaystory.cfm?story_id=10925518

Pierre-Louis said...

Rodrik is the Micheal Moore of economists. He always complain without saying anything...

Dany said...

mmmm, the numbers presented by Rodrik have to reading with caution. The paper he cited, that summarizes some DGE model simulations, conclude: "Of interest to those concerned that poor consumers would face higher food bills
are the changes that might be expected in average food prices in international markets under the
various Doha scenarios. Table 5 shows that for agriculture as a whole, prices would rise less than
2 percent over the ten-year phase-in period. The changes could be as high as 12 percent for dairy
products, 6 percent for cotton, and 3-4 percent for coarse grains, oilseeds, sugar and meat, but
well under 2 percent for other farm products. Thus the annual change in basic food prices at the
retail level would hardly be discernable even to poor consumers, thanks to the supply
responsiveness of farmers to the increases in market access opportunities when agricultural
subsidies and tariffs are reduced".