Was Chinas Inflation in 2004 Led by an Agricultural Price Rise?
) Canadian Journal of Agricultural Economics/Revue canadienne d’agroeconomie, 2008, vol. 56, issue 3, pages 353-364 Abstract: “The escalation of agricultural prices starting from the end of 2003 raised concern about a new round of inflation in China. This paper assesses the impacts of China’s 2003 agricultural output decline on agricultural prices and inflation using a general equilibrium model calibrated to actual data. The results indicate that the 5% decline in agricultural output can only explain 50% of observed changes in agricultural prices, 40% of observed changes in the consumer price index, and 20% of observed changes in the commodity price index. This suggests that China’s 2003 agricultural output decline was not sufficient alone to produce the observed agricultural price increases and inflationary pressure in 2004. This position is counter to the conventional view that agricultural prices led to the 2004 inflation.” Copyright (c) 2008 Canadian Agricultural Economics Society.
