The long-run impact of energy prices on world agricultural markets: The role of macro-economic linkages

• Published in: Energy policy Vol. 38; no. 1; pp. 333 - 339
• Main Authors: Gohin, A., Chantret, F.
• Format: Journal Article
• Language: English
• Published: Kidlington Elsevier Ltd 2010; Elsevier; Elsevier Science Ltd
• Series: Energy Policy
• Subjects: Agricultural prices; Agriculture; Applied general equilibrium models; Applied sciences; Computable General Equilibrium model; Economic conditions; Economic data; Economic impact analysis; Energy; Energy economics; Energy industry; Energy policy; Energy prices; Energy sector; Exact sciences and technology; Food; Food prices; Fossil fuels and derived products; General, economic and professional studies; Income; Life Sciences; Modelling; Oil; Oil prices; Oil prices Agricultural prices Computable General Equilibrium model; Prices; Studies; Oil prices; Agricultural prices; Computable General Equilibrium model; Dairy product; Long term; Petroleum; Price; Cereal; Economic impact; General equilibrium model; Beef; Macroeconomic analysis; Oil economy; Wheat; Food; économie agricole; PRIX DU PETROLE; modélisation économique; COMPUTABLE GENERAL EQUILIBRIUM MODEL; agricultural price; macroéconomie; OIL PRICES; MODELE D'EQUILIBRE GENERAL CALCULABLE; world market; AGRICULTURAL PRICES; marché mondial; prix agricole; economic modelling
• ISSN: 0301-4215; 1873-6777
• DOI: 10.1016/j.enpol.2009.09.023

The world prices of some food and energy products have followed similar large swings in recent years. We investigate the long-run relationship between these prices using a world Computable General Equilibrium model with detailed representations of food and energy markets. Particular attention is paid to specifying macro-economic linkages which have often been overlooked in recent analysis and debate. We find that the omission of these macro-economic linkages has a substantial bearing on this relationship. A positive relationship due to the cost push effect has been identified in most analysis, but we find that the introduction of the real income effect may indeed imply a negative relationship between world food and energy prices.