ON THE OPTIMAL IMPLEMENTATION OF AGRICULTURAL POLICY REFORMS

Fabienne Femenia and Alexandre Gohin

No 91285, 2010: Climate Change in World Agriculture: Mitigation, Adaptation, Trade and Food Security, June 2010, Stuttgart-Hohenheim, Germany from International Agricultural Trade Research Consortium

Abstract: Economic analyses of farm policies generally focus on the long run, steady state impacts while the transition dynamics are often overlooked. In this paper we develop a determinist dynamic computable general equilibrium analysis allowing agents to form imperfect versus pefect expectations. Using an illustrative CAP reform scenario, we simulate an abrupt versus a gradual implementation of this reform. Our results show that if economic agents are able to perfectly anticipate the impacts of the reform, then delaying its implementation is never optimal. On the other hand, if agents gradually learn from market developments, then we find some cases where a gradual implementation of this reform is welfare improving. Such gradual implementation allows minimizing adjustment costs.

Keywords: Agricultural and Food Policy; Political Economy (search for similar items in EconPapers)
Pages: 32
Date: 2010
New Economics Papers: this item is included in nep-agr
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Citations: View citations in EconPapers (2)

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Journal Article: On the optimal implementation of agricultural policy reforms (2013)
Working Paper: On the optimal implementation of agricultural policy reforms (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:iatr10:91285

DOI: 10.22004/ag.econ.91285

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