International Risk Sharing for Food Staples

Scott Bradford (), Digvijay Negi () and Bharat Ramaswami

No 74, Working Papers from Ashoka University, Department of Economics

Abstract: The global output of food staples is far more stable than most individual nations’ outputs, but does this lead to consumption risk sharing? This paper applies tools from the risk sharing literature to address this question for rice, wheat, and maize, using a multilateral risk sharing model that, unlike the canonical model, accounts for trade costs. While the data show that optimal risk sharing does not occur, the wheat market comes closest to the idealized model. Our analysis also implies that both trade and storage play significant roles in smoothing domestic output shocks. Further, we find that risk sharing tends to rise with a nation’s income.

Keywords: food; markets; risk; sharing; international; trade; supply; shocks (search for similar items in EconPapers)
Pages: 74
Date: 2022-02-21
New Economics Papers: this item is included in nep-agr, nep-int and nep-opm
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Citations: View citations in EconPapers (2)

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Related works:
Journal Article: International risk sharing for food staples (2022)
Working Paper: International risk sharing for food staples (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:ash:wpaper:74

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