Arbeitspapier

Can the Tripartite Rubber Council manipulate international rubber prices?

Abstract: In contrast to the trend of a generally increasing liberalization of markets, agriculture remains one of the most protected sectors. In globally distributed production networks the effects of sector specific policies may spill over to other sectors and other countries. While the effects of these policy spill-overs are likely to be substantial, both conceptual and empirical work is surprisingly limited in the literature. This paper suggests an extension of the Gardner Model by two policy interventions to theoretically predict effects of exogenous policy shocks in one input market on price relations towards its substitutes. The economic model is then applied to the markets for natural and synthetic rubber which is an insightful example because the natural rubber market has been dominated by three big exporters who have collectively introduced policies to gain price control for decades. Results of a vector error correction analysis indicate that prices of natural rubber, synthetic rubber and crude oil are cointegrated. Both policies under consideration {an export tax and several measures to restrict supply} partly detached the natural from the synthetic rubber price in international markets. However, one of the policy measures might have produced effects detrimental to the intended targets.

Language
Englisch

Bibliographic citation
Series: EFForTS Discussion Paper Series ; No. 30

Classification
Wirtschaft
Subject
Price Transmission Analysis
VECM
Tripartite Rubber Council
Indonesia
Thailand
Malaysia
Policy Interventions

Event
Geistige Schöpfung
(who)
Kopp, Thomas
Dalheimer, Bernhard
Alamsyah, Zulkifli
Yanita, Mirawati
Brümmer, Bernhard
Event
Veröffentlichung
(who)
GOEDOC, Dokumenten- und Publikationsserver der Georg-August-Universität
(where)
Göttingen
(when)
2019

Handle
URN
urn:nbn:de:gbv:7-webdoc-3995-6
Last update
10.03.2025, 11:44 AM CET

Data provider

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Object type

  • Arbeitspapier

Associated

  • Kopp, Thomas
  • Dalheimer, Bernhard
  • Alamsyah, Zulkifli
  • Yanita, Mirawati
  • Brümmer, Bernhard
  • GOEDOC, Dokumenten- und Publikationsserver der Georg-August-Universität

Time of origin

  • 2019

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