Pourquoi et comment l’instabilité est-elle une caractéristique structurelle des marchés agricoles?

Agricultural commodity markets are volatile, thus inefficient: prices never equate long run marginal costs. In order to correct such a situation, one has to understand where does volatility comes from. Everybody congregate on the fact that large price fluctuations are the consequence of small supply fluctuations magnified by a rigid demand. But there exists two alternative explanations of supply changes. The exogenous explanation relies on natural events, such as climatic accidents. The endogenous explanation focuses on expectations and the way actual markets are operating. Making the distinction between these two theoretical basis is very important, since the remedies to volatility are completely different, even opposite, according to which of them actually holds.

Variant title:
How and why is instability a genuine characteristic of agricultural markets
Issue Date:
Oct 03 2007
Publication Type:
Conference Paper/ Presentation
PURL Identifier:
Total Pages:
JEL Codes:
B5; D4; D6; D8; N5; O1.
Agricultural price volatility is "bad". But where does it come from? Remedies are completely different for "endogenous" or "exogenous" fluctuations. The recent crisis seems to indicate that exogenous remedies have been applied to endogenous fluctuations.
Presented at: Forum on market access mechanisms Montreal-Longueil, Canada, 1-3 octobre 2007

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