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The impact of the United States subsidies on world cotton price: evidence from ARDL bounds tests

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  • Fousseini Traore

Abstract

This article investigates the impact of the United States subsidies on world cotton price in a structural framework. It starts with a simultaneous equations model of world cotton market, and then, it focuses on the reduced form. Using the Autoregressive Distributed Lag (ARDL) bounds tests of Pesaran et al. (2001), no evidence of cointegration is found between the underlying variables. This contrasts with results found in the classical framework, which highlight a strong evidence of a negative impact of subsidies on cotton price, either in the short or long run.

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  • Fousseini Traore, 2011. "The impact of the United States subsidies on world cotton price: evidence from ARDL bounds tests," Applied Economics, Taylor & Francis Journals, vol. 43(28), pages 4193-4201.
    • Handle: RePEc:taf:applec:v:43:y:2011:i:28:p:4193-4201
    DOI: 10.1080/00036846.2010.491443
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    References listed on IDEAS

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    1. Westcott, Paul C. & Price, J. Michael, 2001. "Analysis Of The U.S. Commodity Loan Program With Marketing Loan Provisions," Agricultural Economic Reports 34035, United States Department of Agriculture, Economic Research Service.
    2. Gustafson, Robert L., 1958. "Carryover levels for grains: A method for determining amounts that are optimal under specified conditions," Technical Bulletins 157231, United States Department of Agriculture, Economic Research Service.
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