DYNAMIC CONTROL AS MEASURE TO STABILIZE AGRICULTUTAL MARKETS: On Theory and Options to Correct Cyclical Movements

Ernst-August Nuppenau

No 122467, 123rd Seminar, February 23-24, 2012, Dublin, Ireland from European Association of Agricultural Economists

Abstract: This paper deals with a control theory approach to stabilize cyclical price movements. Firstly, we pursue a welfare economist’s approach, delineating a public objective function derived from consumer and producer surplus as well as trade budget at world market price. Trade is a con¬trol variable and the market price is a state variable. Moreover we assume adaptive formation of price expectation at the producer side. Secondly the control problem is outline and solved by discrete control theory. Thirdly, the paper makes suggestions how to translate the optimal control framework and results into a trade policy of the envisaged country. Finally, limitations are discussed and an outlook for broadening the concept for international concerns is offered.

Keywords: Risk; and; Uncertainty (search for similar items in EconPapers)
Pages: 16
Date: 2012-02-23
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Persistent link: https://EconPapers.repec.org/RePEc:ags:eaa123:122467

DOI: 10.22004/ag.econ.122467

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