Agricultural productivity shocks and poverty in India: The short- and long-term effects of monsoon rainfall

Bjoern Brey and Matthias Hertweck

No 18/2019, Discussion Papers from Deutsche Bundesbank

Abstract: This paper examines the dynamic effects of monsoon rainfall shocks on yield, wages, and prices in the Indian agricultural sector. We distinguish between positive and negative rainfall shocks and explicitly consider their spatial dimension (local/regional). We find that particularly negative regional shocks exert adverse effects. The enormous drop in agricultural yield is short-lived, but elicits a persistent decline (increase) in wages (food prices). Negative local shocks affect only wages, but not prices. This indicates that, in the food market, intra-regional trading mitigates the impact of local shocks. However, in the labour market, the arbitrage mechanism through migration appears substantially weaker.

Keywords: rainfall shocks; agricultural yield; wages; food prices (search for similar items in EconPapers)
JEL-codes: C33 E32 O13 Q11 (search for similar items in EconPapers)
Date: 2019
New Economics Papers: this item is included in nep-agr, nep-dev and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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https://www.econstor.eu/bitstream/10419/197963/1/1667361996.pdf (application/pdf)

Related works:
Working Paper: The Persistent Effects of Monsoon Rainfall Shocks in India: A Nonlinear VAR Approach (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:bubdps:182019

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