Thomas Hertel

Dept. of Agricultural Econ.
Purdue University
1145 Krannert Bldg.
West Lafayette, IN 47907

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NBER Working Papers and Publications

March 2011Commodity Price Volatility in the Biofuel Era: An Examination of the Linkage between Energy and Agricultural Markets
with Jayson Beckman
in The Intended and Unintended Effects of U.S. Agricultural and Biotechnology Policies, Joshua S. Graff Zivin and Jeffrey M. Perloff, editors
February 2011Commodity Price Volatility in the Biofuel Era: An Examination of the Linkage Between Energy and Agricultural Markets
with Jayson Beckman: w16824
Agricultural and energy commodity prices have traditionally exhibited relatively low correlation. However, recent increases in biofuel production have altered the agriculture-energy relationship in a fundamental way. This increase has drawn on corn previously sold to other uses, as well as acreage devoted to other crops. The US RFS envisions a further boost of ethanol production to 15 billion gallons per year, which might be expected to further strengthen the linkages. We estimate that, in the presence of a binding RFS, the inherent volatility in the US coarse grains market will rise by about one-quarter. And the volatility of the US coarse grains price to supply side shocks in that market will rise by nearly one-half. Under a high oil price scenario, rather than the RFS binding, the b...
May 2004How Confident Can We Be in CGE-Based Assessments of Free Trade Agreements?
with David Hummels, Maros Ivanic, Roman Keeney: w10477
Computable General Equilibrium models, widely used for the analysis of Free Trade Agreements (FTAs) are often criticized for having poor econometric foundations. This paper improves the linkage between econometric estimates of key parameters and their usage in CGE analysis in order to better evaluate the likely outcome of a FTA for the Americas. Our econometric work focuses on estimation of the elasticity of substitution among imports from different countries, which is especially critical for evaluating the positive and normative outcomes of FTAs. We match the data in the econometric exercise to the policy experiment at hand. Then we sample from the distribution of parameter values given by our econometric estimates in order to generate a distribution of model results, from which we can co...

Published: Hertel, Thomas & Hummels, David & Ivanic, Maros & Keeney, Roman, 2007. "How confident can we be of CGE-based assessments of Free Trade Agreements?," Economic Modelling, Elsevier, vol. 24(4), pages 611-635, July. citation courtesy of

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