Commodity prices

Commodity world prices experienced important changes over the past five decades (see Figures 8 and 9, for real28 and nominal prices, respectively). During the 1960s and 1970s, prices of agricultural products (particularly food and beverages) stayed high in real terms. Oil prices jumped significantly during the mid- to late 1970s. As Figure 8 World real prices for commodities, 1957-2008. Source IMF (2008). Figure 8 World real prices for commodities, 1957-2008. Source IMF (2008). I Metals -A-...

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This handbook devotes most of its chapters to reviewing sectoral policies related to agriculture. This chapter moves to a macroeconomic and macrosectoral view of the policy framework and its possible interaction with the agricultural sector. A previous handbook (Gordon Rausser and Bruce Gardner, eds., 2002) devoted a whole section with several chapters to economywide policies.1 Since then, there have been nontrivial changes in macroeconomic trends and policy debates, not only regarding domestic...

Fiscal policies 421 Background

Fiscal policies have general macroeconomic effects on aggregate demand expansion as well as impacts on aggregate supply through the influence on macroprices (price level and inflation, interest rate, real exchange rate, and sometimes wage levels in the economy) and microeconomic effects linked to specific taxes, subsidies, and expenditures. It has been argued that high levels of government expenditures and overall taxes, as well as persistent deficits, affect growth negatively (Barro and...

Heterogeneity of country conditions

The fact that developing countries are different from industrialized countries and that they also differ greatly among themselves is obvious. Since the early debates about long-term development strategies, those differences were invoked to design specific policies for developing countries. That debate also included the need to adjust macro-economic policies (and not only long-term growth policies) to the specific structural characteristics of those countries.9 More recently different books have...

Macroeconomics Macrosectoral Policies and Agriculture in Developing Countries

Macroeconomic and Macrosectoral Policies Some Precisions and Conceptual Issues 3036 1.1 What are the macroeconomic problems and issues considered 3036 1.2 Macroeconomic accounts 3038 1.3 Macroeconomic links to agriculture and the rural sector 3044 2. Brief Characterization of Macroeconomic and Agricultural Structural Issues 2.1 Heterogeneity of country conditions 3048 2.2 Heterogeneity of agricultural conditions Production and food security 3049 2.3 Heterogeneity of agricultural conditions...

Monetary and financial issues linked to agriculture

What are some of the possible implications of the trends and policies discussed previously for the agricultural sector For those countries with open capital accounts and dollarization (mostly in the urbanized category), the different monetary conditions changed the possibilities for resorting to the traditional approach of directed credit. As mentioned, one of the characteristics of the developmental state in many developing countries until the market liberalization reforms starting in the late...

Volatility and crises

Besides average growth performance, volatility of growth may have consequences for agriculture. Table 3 shows the volatility in aggregate consumption for developing countries. Figure 5 shows the proportion of developing countries with zero or negative growth each year from 1961 to 2005, measured in GDP per capita (see also the decade averages in Table 3). The largest number of developing countries in recession occurred at the time of global slowdowns in 1975, 1982, and 1992. The exception is...

World Monetary Conditions Inflation and Interest Rates

Schuh's analysis pointed to increasing inflation as one of the characteristics of the world economy since then monetary and macroeconomic policies in general have reversed the trend, in what has been called the rise and fall of inflation (IMF, 1996), with a parallel cycle for nominal and real interest rates (see Table 3). Along with the reduction in growth volatility during recent years (which included both developing and industrialized countries), the decline in inflation and interest rates...

A chronological narrative 521 The 1960s and the 1970s

As discussed in Section 3, the 1960s were years of high growth (in both developed and developing countries), moderate inflation, low (and even negative) real interest rates, accelerated expansion of trade, and high real prices of commodities (see Table 3). The economic buoyancy of those years was based on expansionary Keynesian macro-economic policies in industrialized and developing countries. Stable exchange rates among main industrialized countries under the Bretton Woods system, coupled...

Macroeconomic policies and the agricultural sector

During the 1960s and 1970s, while still within the framework of development and macroeconomic policies shaped by the import-substitution industrialization, the agricultural sector began to receive greater attention. Sectoral policies included investments in technology (the Green Revolution), land reform, settlement programs, and community development, along with specific price, marketing, and credit schemes. In the 1970s, under the auspices of various international organizations, the main...

Fiscal issues and agriculture

Expenditures Deteriorating public sector finances, along with the decline in world agricultural prices in the mid-1980s, led to fiscal adjustments and pressures to reduce support for agriculture in many countries. For instance, at the beginning of the 1980s several countries in South America, such as Brazil and Chile, embarked on accelerated programs to expand production of wheat and other cereals due to concerns about shortages heightened by high prices in the second half of the 1970s. When...