Problems of Measuring Price Distortion and Price Transmission: A Framework for Analysis

摘要

In the contemporary condition where IMF and IBRD lending policies to less-developed countries (LDCs) involve imposing conditions for agricultural price and trade policy reform, and where the reform requirements are based on measures of price distortion and protection, this paper examines aspects of the robustness of these measures. It presents a framework for deriving measures of price distortion and price transmission. Using this, it considers the links between both types of measure, and something of the types of results which can be expected. It also considers general aspects of the relationship between domestic LDC and international commodity prices, and argues that many studies use, or assume, measures of price distortion and transmission whichare flawed.