One of the more unhappy effects of the recent, massive rise in the price of crude oil has been its impact on those developing countries not fortunate enough to be oil exporters themselves. The authors offer a proposal for rechanneling some of the oil revenues to the impacted developing countries.

This paper analyzes the transmission from global commodity to domestic food prices for a large set of countries. First, a theoretical model is developed to explain price transmission for different trade regimes. Drawing from the competitive storage model under rational expectations, it is shown...