Optimal Commodity Price Stabilization over the Business Cycle

Rodrigo Suescun

No 3301, Borradores de Economia from Banco de la Republica

Abstract: This paper develops a model to study the design, characterization and dynamic implications of stabilization policies in a dynamic general equilibrium model of the business cycle for an economy tainted by the Dutch disease. The model incorporates a stabilization scheme for the producer price of an export crop in a three-sector RBC model. Stabilization funds have been very popular instruments in developing countries to deal with export price instability. This paper shows that such schemes cannot improve the functioning of the economy, notwithstanding the assumed suboptimality of private outcomes and the possibility of having welfare enhancing policies.

Keywords: Dynamic games (search for similar items in EconPapers)
JEL-codes: E42 (search for similar items in EconPapers)
Pages: 33
Date: 2000-08-30
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.banrep.gov.co/docum/ftp/borra154.pdf

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:col:000094:003301

Access Statistics for this paper

More papers in Borradores de Economia from Banco de la Republica
Bibliographic data for series maintained by Clorith Angelica Bahos Olivera ().