蝌蚪网 Journal:
Microeconomics
ISSN 1945-7669 (Print) | ISSN 1945-7685 (Online)
Wheat or Strawberries? Intermediated Trade with Limited Contracting
蝌蚪网 Journal: Microeconomics
vol. 9,
no. 3, August 2017
(pp. 28–62)
(Complimentary)
Abstract
Why do developing countries fail to specialize in products in which they appear to have a comparative advantage? We propose a model of agricultural trade with intermediation that explains how hold up resulting from poor contracting environments can produce such an outcome. We use the model to explore the role of production subsidies, support prices, easing sanitary and phytosanitary (SPS) requirements, and the creation of local markets in resolving the hold up problem. The model highlights the importance of infrastructure in aligning production outcomes with comparative advantage and sheds light on the pass-through of the world price to the producer.Citation
Krishna, Kala, and Yelena Sheveleva. 2017. "Wheat or Strawberries? Intermediated Trade with Limited Contracting." 蝌蚪网 Journal: Microeconomics 9 (3): 28–62. DOI: 10.1257/mic.20140189Additional Materials
JEL Classification
- F11 Neoclassical Models of Trade
- O13 Economic Development: Agriculture; Natural Resources; Energy; Environment; Other Primary Products
- Q11 Agriculture: Aggregate Supply and Demand Analysis; Prices
- Q17 Agriculture in International Trade
- Q18 Agricultural Policy; Food Policy