This paper develops a two-step method to estimate the influence of non-deterministic factors in production on subsequent food prices, and finds that non-deterministic factors of wheat production do significantly affect both wheat and corn prices in the world and, however, those of corn do not.

"This paper examines the impact of short-sale constraints on the magnitude of international diversification benefit for U.S. investors during the period of 1976-1998. The diversification benefit is measured as the increase in expected return when switching from the U.S. equity index portfolio to...