Agricultural Markets and Risks : Management of the Latter, Not the Former
The authors review the historical relationship between the work of applied economists, and policymakers, and the institutions that came to characterize the commodity, and risk markets of the 1980s. These institutions were a response to the harmful...
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
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World Bank, Washington, DC
2013
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| Online Access: | http://documents.worldbank.org/curated/en/2002/02/1719824/agricultural-markets-risks-management-latter-not-former http://hdl.handle.net/10986/15608 |
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okr-10986-156082021-04-23T14:03:19Z Agricultural Markets and Risks : Management of the Latter, Not the Former Varangis, Panos Larson, Donald Anderson, Jack R. AGRICULTURAL MARKETS RISK MANAGEMENT INSTITUTIONAL FRAMEWORK COMMODITY MARKETS TRADE CONTROLS AGRICULTURAL POLICIES MARKET ORIENTATION PRICE ELASTICITY STABILIZATION OF PRICES OF PRIMARY PRODUCTS MACROECONOMIC CORRELATIONS BUSINESS ENVIRONMENT POLICY PLANNING GOVERNMENT ROLE MARKET-BASED INSTRUMENTS EMERGING ECONOMIES BANK'S TECHNICAL ASSISTANCE ROLE ADMINISTRATIVE COSTS ADVERSE EFFECTS BANKRUPTCY BASIS RISK BORROWING BROKERS CATASTROPHES CATASTROPHIC RISKS CENTRAL BANKS COMMODITIES CONSUMERS CREDIT MARKETS CROP INSURANCE DEBT DEBT RELIEF DISASTERS ECONOMICS ECONOMISTS ELASTICITIES EMPIRICAL EVIDENCE EMPLOYMENT EQUITY CAPITAL EXCHANGE RATE EXCHANGE RATES EXPENDITURES FINANCIAL LEVERAGE FINANCIAL RISK FIXED CURRENCIES FUTURES CONTRACTS IMPORTS INCOME INFLATION INPUT PRICES INSURANCE INSURANCE CONTRACTS INSURANCE MARKETS INSURERS INVENTORIES LENDING INSTITUTIONS LIMITED COMPETITION LIQUIDITY MARKET FAILURES MARKET INSTRUMENTS MARKET POWER MITIGATION MONOPOLIES MORAL HAZARD OIL OPPORTUNITY COSTS POLICY INSTRUMENTS POLICY MAKERS POLICY RESEARCH PREMIUMS PRICE RISK PRICE VARIATIONS PRODUCERS PRODUCTIVITY PROFITABILITY PROGRAMS PUBLIC POLICY RATES RESEARCH AGENDA RETIREMENT RETURN ON EQUITY RISK MANAGEMENT RISK REDUCTION RURAL COMMUNITIES SAVINGS TAXATION TERMS OF TRADE TRADE SHOCKS UNEMPLOYMENT WELFARE GAINS The authors review the historical relationship between the work of applied economists, and policymakers, and the institutions that came to characterize the commodity, and risk markets of the 1980s. These institutions were a response to the harmful consequences of commodity market volatility, and declining terms of trade. But the chosen policies, and instruments relied on market interventions, to directly affect prices, or the distribution of prices in domestic, and international markets. For practical, and more fundamental reasons, this approach failed. The authors next discuss how a growing body of work, contributed to a change in thinking that moved policy away from stabilization goals, toward policies that emphasized the management of risks. They distinguish between the macroeconomic effects of volatile commodity markets, and the consequences for businesses, and households. The authors argue that both sets of problems remain important development issues, but that appropriate policy instruments are largely separate. Nonetheless, because governments, households, and firms must all respond to a wide range of sources of risk, they emphasize the role for an integrated policy by government. Increasingly, alternative approaches have come to rely on market-based instruments. Such approaches accept the market view of relative prices as immutable, but address directly the negative consequences of volatility. As traditional risk markets (such as futures and insurance markets) expand, and new parametric markets emerge, the practicality of applying market-based instruments to traditional risk, and development problems increases. The authors show the change in approaches to risk, and the reliance on old, and new market instruments, with new, and sometimes experimental programs, with special emphasis on programs at the World Bank. 2013-09-04T19:25:31Z 2013-09-04T19:25:31Z 2002-02 http://documents.worldbank.org/curated/en/2002/02/1719824/agricultural-markets-risks-management-latter-not-former http://hdl.handle.net/10986/15608 English en_US Policy Research Working Paper;No. 2793 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English en_US |
| topic |
AGRICULTURAL MARKETS RISK MANAGEMENT INSTITUTIONAL FRAMEWORK COMMODITY MARKETS TRADE CONTROLS AGRICULTURAL POLICIES MARKET ORIENTATION PRICE ELASTICITY STABILIZATION OF PRICES OF PRIMARY PRODUCTS MACROECONOMIC CORRELATIONS BUSINESS ENVIRONMENT POLICY PLANNING GOVERNMENT ROLE MARKET-BASED INSTRUMENTS EMERGING ECONOMIES BANK'S TECHNICAL ASSISTANCE ROLE ADMINISTRATIVE COSTS ADVERSE EFFECTS BANKRUPTCY BASIS RISK BORROWING BROKERS CATASTROPHES CATASTROPHIC RISKS CENTRAL BANKS COMMODITIES CONSUMERS CREDIT MARKETS CROP INSURANCE DEBT DEBT RELIEF DISASTERS ECONOMICS ECONOMISTS ELASTICITIES EMPIRICAL EVIDENCE EMPLOYMENT EQUITY CAPITAL EXCHANGE RATE EXCHANGE RATES EXPENDITURES FINANCIAL LEVERAGE FINANCIAL RISK FIXED CURRENCIES FUTURES CONTRACTS IMPORTS INCOME INFLATION INPUT PRICES INSURANCE INSURANCE CONTRACTS INSURANCE MARKETS INSURERS INVENTORIES LENDING INSTITUTIONS LIMITED COMPETITION LIQUIDITY MARKET FAILURES MARKET INSTRUMENTS MARKET POWER MITIGATION MONOPOLIES MORAL HAZARD OIL OPPORTUNITY COSTS POLICY INSTRUMENTS POLICY MAKERS POLICY RESEARCH PREMIUMS PRICE RISK PRICE VARIATIONS PRODUCERS PRODUCTIVITY PROFITABILITY PROGRAMS PUBLIC POLICY RATES RESEARCH AGENDA RETIREMENT RETURN ON EQUITY RISK MANAGEMENT RISK REDUCTION RURAL COMMUNITIES SAVINGS TAXATION TERMS OF TRADE TRADE SHOCKS UNEMPLOYMENT WELFARE GAINS |
| spellingShingle |
AGRICULTURAL MARKETS RISK MANAGEMENT INSTITUTIONAL FRAMEWORK COMMODITY MARKETS TRADE CONTROLS AGRICULTURAL POLICIES MARKET ORIENTATION PRICE ELASTICITY STABILIZATION OF PRICES OF PRIMARY PRODUCTS MACROECONOMIC CORRELATIONS BUSINESS ENVIRONMENT POLICY PLANNING GOVERNMENT ROLE MARKET-BASED INSTRUMENTS EMERGING ECONOMIES BANK'S TECHNICAL ASSISTANCE ROLE ADMINISTRATIVE COSTS ADVERSE EFFECTS BANKRUPTCY BASIS RISK BORROWING BROKERS CATASTROPHES CATASTROPHIC RISKS CENTRAL BANKS COMMODITIES CONSUMERS CREDIT MARKETS CROP INSURANCE DEBT DEBT RELIEF DISASTERS ECONOMICS ECONOMISTS ELASTICITIES EMPIRICAL EVIDENCE EMPLOYMENT EQUITY CAPITAL EXCHANGE RATE EXCHANGE RATES EXPENDITURES FINANCIAL LEVERAGE FINANCIAL RISK FIXED CURRENCIES FUTURES CONTRACTS IMPORTS INCOME INFLATION INPUT PRICES INSURANCE INSURANCE CONTRACTS INSURANCE MARKETS INSURERS INVENTORIES LENDING INSTITUTIONS LIMITED COMPETITION LIQUIDITY MARKET FAILURES MARKET INSTRUMENTS MARKET POWER MITIGATION MONOPOLIES MORAL HAZARD OIL OPPORTUNITY COSTS POLICY INSTRUMENTS POLICY MAKERS POLICY RESEARCH PREMIUMS PRICE RISK PRICE VARIATIONS PRODUCERS PRODUCTIVITY PROFITABILITY PROGRAMS PUBLIC POLICY RATES RESEARCH AGENDA RETIREMENT RETURN ON EQUITY RISK MANAGEMENT RISK REDUCTION RURAL COMMUNITIES SAVINGS TAXATION TERMS OF TRADE TRADE SHOCKS UNEMPLOYMENT WELFARE GAINS Varangis, Panos Larson, Donald Anderson, Jack R. Agricultural Markets and Risks : Management of the Latter, Not the Former |
| relation |
Policy Research Working Paper;No. 2793 |
| description |
The authors review the historical
relationship between the work of applied economists, and
policymakers, and the institutions that came to characterize
the commodity, and risk markets of the 1980s. These
institutions were a response to the harmful consequences of
commodity market volatility, and declining terms of trade.
But the chosen policies, and instruments relied on market
interventions, to directly affect prices, or the
distribution of prices in domestic, and international
markets. For practical, and more fundamental reasons, this
approach failed. The authors next discuss how a growing body
of work, contributed to a change in thinking that moved
policy away from stabilization goals, toward policies that
emphasized the management of risks. They distinguish between
the macroeconomic effects of volatile commodity markets, and
the consequences for businesses, and households. The authors
argue that both sets of problems remain important
development issues, but that appropriate policy instruments
are largely separate. Nonetheless, because governments,
households, and firms must all respond to a wide range of
sources of risk, they emphasize the role for an integrated
policy by government. Increasingly, alternative approaches
have come to rely on market-based instruments. Such
approaches accept the market view of relative prices as
immutable, but address directly the negative consequences of
volatility. As traditional risk markets (such as futures and
insurance markets) expand, and new parametric markets
emerge, the practicality of applying market-based
instruments to traditional risk, and development problems
increases. The authors show the change in approaches to
risk, and the reliance on old, and new market instruments,
with new, and sometimes experimental programs, with special
emphasis on programs at the World Bank. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Varangis, Panos Larson, Donald Anderson, Jack R. |
| author_facet |
Varangis, Panos Larson, Donald Anderson, Jack R. |
| author_sort |
Varangis, Panos |
| title |
Agricultural Markets and Risks : Management of the Latter, Not the Former |
| title_short |
Agricultural Markets and Risks : Management of the Latter, Not the Former |
| title_full |
Agricultural Markets and Risks : Management of the Latter, Not the Former |
| title_fullStr |
Agricultural Markets and Risks : Management of the Latter, Not the Former |
| title_full_unstemmed |
Agricultural Markets and Risks : Management of the Latter, Not the Former |
| title_sort |
agricultural markets and risks : management of the latter, not the former |
| publisher |
World Bank, Washington, DC |
| publishDate |
2013 |
| url |
http://documents.worldbank.org/curated/en/2002/02/1719824/agricultural-markets-risks-management-latter-not-former http://hdl.handle.net/10986/15608 |
| _version_ |
1764429691474673664 |