The Macroeconomic Repercussions of Agricultural Shocks and their Implications for Insurance

Paul Collier

No DP2002-46, WIDER Working Paper Series from World Institute for Development Economic Research (UNU-WIDER)

Abstract: The paper considers the macroeconomic impact of shocks to agricultural output and of negative and positive price shocks. It is shown that negative price shocks have particularly large externalities: it is estimated that the overall impact of these negative shocks on GDP may well be double their direct impact. In terms of policy, the presence of externalities justifies subsidising the provision of insurance. If insurance is not feasible, then foreign aid may be helpful.

Keywords: Agriculture; Insurance; Macroeconomics; Monetary policy; Prices (search for similar items in EconPapers)
Date: 2002
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Citations: View citations in EconPapers (5)

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