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Causes of the 2000s Food Price Surge: New Evidence from Structural VAR

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  • Daniel Grabowski

    (University of Giessen)

Abstract

In 2001 began a rise in the prices of food commodities not seen since the 1970s. Some observers attribute the increase in part to food commodity speculation. This hypothesis is examined by disentangling the impact of speculation on grain prices from that of fundamental supply and demand forces. Even though results point to a generally stabilising infl uence of speculation on prices, speculation is shown to have pushed prices further up during crisis years. The analysis is based on a structural vector autoregressive model identified by sign and zero restrictions. The model is estimated for global corn, wheat and rice markets.

Suggested Citation

  • Daniel Grabowski, 2016. "Causes of the 2000s Food Price Surge: New Evidence from Structural VAR," MAGKS Papers on Economics 201631, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    • Handle: RePEc:mar:magkse:201631
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    Keywords

    food price crisis; grain prices; structural VAR; sign restrictions;
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