Causes of the Great Food Commodity Price Booms in the New Millennium: An Essay in Honor of Gordon Rausser

Harry de Gorter ()

A chapter in Modern Agricultural and Resource Economics and Policy, 2022, pp 415-439 from Springer

Abstract: Abstract The doubling of corn prices in 2006–2007 and tripling of grain/oilseed prices in 2007–2008, 2010–2011 and 2012–2013 represent the most dramatic price booms in history with no busts. This can only be explained by a new paradigm, namely the advent of a corn-ethanol price link caused by biofuel policies. While all other economists erroneously explained prices with traditional methodologies. Rausser distinguished himself by changing his mind and adopting the new method outlined in this paper. To explain economists resistance to adopting new models of price determination, I use basic principles of sociology (need to conform and imitate), behavioral economics (esp. confirmation bias and conservatism) and economics (naked self-interest). I show how Rausser did not succumb to sclerotic thinking so common in Homo Academicus where the coziness of the Academic-Civil-Industrial Complex prevails. I thereby trace the characteristics of what makes up such a great economist, including those that Keynes noted that make up a master economist. I conclude Rausser is a legend in our profession.

Keywords: A14; Q02; D90; Q41 (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:spr:nrmchp:978-3-030-77760-9_17

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DOI: 10.1007/978-3-030-77760-9_17

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