 War in Ukraine: The rational “ wait‐and‐see ” mode of global food marketsPost-Print from HAL Abstract: Russia's invasion of Ukraine is a major shock at the heart of the breadbasket of Europe at a time when global stocks are running short. With inelastic supply and demand for such basic goods and lack of inventories to cushion the shock, the basic economics of storage arbitrage explains the commodity price spikes needed to ration the war-related supply shortage. In this paper, I show that sound policymaking in this context could rely on the rational expectations storage model to make sense of the chaotic price fluctuations. Empirical analysis of the unfolding commodity shock using a storage model lens suggests that, 3 months after the Russian invasion, the global food market switched into a "wait-and-see" mode, with price movements reflecting a loss in the size of the global share of caloric production from Ukraine. Keywords: Commodity price dynamics; Food security; Storage; Volatility (search for similar items in EconPapers) Published in Applied Economic Perspectives and Policy, inPress, ⟨10.1002/aepp.13335⟩ There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it. Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-03966878 DOI: 10.1002/aepp.13335 Access Statistics for this paper More papers in Post-Print from HAL |
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