Political Economy of Trade and Storage Policies Coordination, and the Role of Domestic Public Storage in the World MarketNo 2016-16, School of Economics and Public Policy Working Papers from University of Adelaide, School of Economics and Public Policy Abstract: In this paper, a standard theoretical model of trade policy is extended to incorporate domestic public storage policy, so as to explore government political motivations in the context of border and domestic policy coordination. Theoretically, domestic storage policy can add to price stabilization in the presence of trade policy, and can reinforce a price-insulating trade policy through increasing the countryÂ’s market power. However, the effects of these two price stabilization instruments on the international market price are in opposite directions. Furthermore, the effect of domestic public storage on the world market is then tested, using China cotton as a case study. The VAR econometrics reveal that in the case of cotton during 2011-14, China as a large player in the global market was able to stabilize to a non-trivial extent the international price of cotton through altering its public stockpile. Keywords: Public storage policy; Trade policy; Policy coordination; World cotton price; VAR simulation; China (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:adl:wpaper:2016-16 Access Statistics for this paper More papers in School of Economics and Public Policy Working Papers from University of Adelaide, School of Economics and Public Policy Contact information at EDIRC. |
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