Series: IMF Working Papers
Author(s): Paolo Giordani , Nadia Rocha , and Michele Ruta
Publisher: INTERNATIONAL MONETARY FUND
Publication Date: 26 September 2014
Keywords: Loss aversion, Multiplier effect, Food crisis, domestic price, world price, global trade, import tariff, import subsidy, International Relations and International Political Economy: Other, Global Commodity Crises
This paper studies the relationship between trade policy and food prices. We show that, when individuals are loss averse, governments may use trade policy to shield the domestic economy from large food price shocks...