Cross-pollination can be caused by birds, insects and wind. Genetically modified (GM) seeds are produced each year in a controlled environment to maintain their purity. However, pollen from the GM crop can be transferred to traditional crops. When the GM crop producers are in long-run...

This paper investigates whether a small country facing foreign price instability benefits from active stabilization of the domestic price of the importable. For example, the European Community can be treated as a small open economy facing price instability of agricultural products originating in...

This paper analyzes the incidence of agricultural commodity programs. Producers advocate commodity programs and receive price subsidies, but free entry and perfectly elastic supplies of nonland inputs ensure that landowners extract the entire surplus from price subsidies. Moreover, an increase...

Price stabilization is an important policy goal of government intervention in competitive markets. These policies are primarily directed at raising producer income and stabilizing market prices at levels acceptable to consumers and producers (Fox 1956, Turnovsky 1978, Newbery and Stiglitz 1979)....

This paper considers the effects of tariffication-conversion of a variable import levy, widely used in the European Community, into an equivalent ad valorem tariff on trade and welfare. While tough negotiations lie ahead over the exact rates of tariff reduction, contracting countries in...

This paper investigates optimal trade policies for a developing, small open economy that faces international price uncertainly. Trade taxes are used to finance provision of a public good, which enters the utility function of consumers. If demands for private goods are independent of the public...

This paper investigates whether China can benefit from a trade surplus in one period, using it to pay off the debt in the next period by manipulating the exchange rates. If the marginal utility of income is nonincreasing in the exchange rate, then the equilibrium exchange rates that yield a...

China’s currency policy has been criticized for its apparent pursuit of mercantile advantage by artificially stimulating exports, which potentially have adverse effects on other economies. While China’s currency policy may have positive output effects, there may be additional profits or...

This paper investigates the possible gains from currency intervention by central banks using a two-period framework in which a trade surplus in one period must be offset by a trade deficit in the next period. It is shown that when the interest rate is zero, the optimal policy is nonintervention....