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EC price harmonization: A macroeconomic approach

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  • P. M. SCHMITZ

Abstract

The results of this study suggest that an EC price harmonization at the ‘common’ level should be rejected from the EC allocation point of view; however, harmonization at a lower common price level could provide allocative gains. The merits of price harmonization need to be judged differently by the member countries as long as the system of common financing induces real income transfer flows between the partners. When allocative and income transfer effects are combined, France gains from price harmonization, but the United Kingdom and the Federal Republic of Germany lose. Harmonization would tend to restore the balance of payments in the case of the United Kingdom and the Federal Republic of Germany but would lead to increasing cost of living in the devaluing countries, especially in the United Kingdom and Italy. The elimination of MCAs would not necessarily decrease the expenditure of the agricultural funds.

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  • P. M. Schmitz, 1979. "EC price harmonization: A macroeconomic approach," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 6(2), pages 165-190.
    • Handle: RePEc:oup:erevae:v:6:y:1979:i:2:p:165-190.
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    File URL: http://hdl.handle.net/10.1093/erae/6.2.165
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    Cited by:

    1. S. von Cramon‐Taubadel, 1990. "The Influence Of The Agri‐Monetary System On Agricultural Trade In The Ec: The Case Of Sugar," Journal of Agricultural Economics, Wiley Blackwell, vol. 41(3), pages 346-361, September.
    2. Josling, Timothy E. & Pearson, Scott R., 1982. "Developments in the Common Agricultural Policy of the European Community," Foreign Agricultural Economic Report (FAER) 147189, United States Department of Agriculture, Economic Research Service.
    3. Harald Witzke, 1986. "Endogenous supranational policy decisions: The Common Agricultural Policy of the European Community," Public Choice, Springer, vol. 48(2), pages 157-174, January.

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