Domestic Price Stabilization Schemes in Developing Countries

1990 ◽  
Vol 38 (3) ◽  
pp. 539-558 ◽  
Author(s):  
Odin Knudsen ◽  
John Nash
Keyword(s):  
Developing Countries ◽  
Domestic Price ◽  
Price Stabilization

scholarly journals The Impact of Changes in Exchange Rate on Prices: A Case Study of Pakistan

1999 ◽  
Vol 38 (4II) ◽  
pp. 1059-1066 ◽  
Author(s):  
Rehana Siddiqui ◽  
Naeem Akhtar
Keyword(s):  
Developing Countries ◽  
Exchange Rate ◽  
Price Level ◽  
Empirical Studies ◽  
Developed Countries ◽  
Domestic Price ◽  
Limited Effectiveness ◽  
Trading Partners ◽  
The Exchange Rate ◽  
The Impact

Rapid changes in prices are of concern in almost all countries since the 1970s. However, the issue is of serious concern in developing countries where imported inflation is seen to be driving domestic inflation resulting in limited effectiveness of domestic policies to control inflation. Like most developing countries, in Pakistan also, the domestic price level started rising from the mid-1970s. The exchange rate started depreciating continuously from the early 1980s.1 Continuous devaluation of currency and inflation in the 1980s seems to suggest a correlation between the two variables. The empirical studies, like Rana and Dowling (1983) suggest that foreign inflation was the most significant factor in explaining changes in the domestic price level in nine Asian less developed countries during 1973-79. This suggests that, while, these countries could do little to control inflation, the policies of other countries, particularly their major trading partners, had a significant impact on their domestic prices. A simultaneous relationship between the inflation rate and the exchange rate changes is viewed by certain researchers to exist. [Cooper (1971) and Krugman and Taylor (1978).]

Special safeguards for developing country agriculture: a proposal for WTO negotiations

2003 ◽  
Vol 2 (1) ◽  
pp. 5-31 ◽  
Author(s):  
ALBERTO VALDÉS ◽  
WILLIAM FOSTER
Keyword(s):  
Developing Countries ◽  
Trade Liberalization ◽  
Short Duration ◽  
Commodity Prices ◽  
Price Transmission ◽  
Price Risk ◽  
Domestic Price ◽  
World Price ◽  
Safeguard Mechanism ◽  
Price Floor

Trade liberalization, particularly QR elimination, enhances border-to-domestic price transmission. A political obstacle to further liberalization (and to exposure to greater price transmission) in developing countries is fear of extended ‘low price’ periods in import-competing sectors. World commodity prices show shock persistence and asymmetry, with short-duration spikes and longer-duration troughs. Developing countries are unlikely to adopt fiscally burdensome domestic programs to compensate for persistent low-price episodes, making border measures attractive. WTO Special Safeguards could address low price problems, but present rules exclude their use by most developing countries. A possible modification of the Special Safeguard Clause could encourage reduction of overall protection. World price characteristics and the implications of low price periods for import-competing farmers are reviewed. To manage low-price risk under WTO commitments a restricted price floor policy could be implemented through a Special Safeguard Mechanism. An example illustrates the levels, frequency and duration of such a price-floor-based surcharge.

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