Title: Effect of trade liberalisation on volatility: the experience of Indian agriculture

Authors: Nilabja Ghosh, Sangeeta Chakravarty, M. Rajeshwor

Addresses: Institute of Economic Growth, University of Delhi Enclave, North Campus, Delhi 110007, India. ' Institute of Economic Growth, University of Delhi Enclave, North Campus, Delhi 110007, India. ' Institute of Economic Growth, University of Delhi Enclave, North Campus, Delhi 110007, India

Abstract: Trade liberalisation in agriculture can be acceptable only if developing countries can be convinced of its benefits. Apprehensions about the effect on market volatilities and the resultant implications for supply have however slowed down negotiations. Time-series analyses of data on select commodity prices show that although the static measures suggest an across the board rise in volatility, a dynamic approach finds a possible association between volatility and trade liberalisation only for the two commercial crops among the six crops studied. A parallel analysis with supply responses also reinforces the same finding.

Keywords: volatility; trade negotiations; EGARCH; supply response; Indian agriculture; India; trade liberalisation; time-series analysis; commodity prices; crops.

DOI: 10.1504/IJEPEE.2010.035181

International Journal of Economic Policy in Emerging Economies, 2010 Vol.3 No.3, pp.253 - 271

Published online: 11 Sep 2010 *

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