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Evaluating the effects of the alternative supply management schemes mentioned in the previous chapter on tropical beverage markets can be best made through simulations from computable econometric models. Along with equations that connect the world price to the domestic producer price, a new model has been constructed for each beverage from production and consumptions regression equations in each involved country. Thirty-nine endogenous variables are used for the cocoa model, fifty-two for coffee, and forty-two for tea. The model's calculation encompasses the period from between 1963 and 1990 or 1991. While the simulations relate to the latter half of the 1980s in which real prices and real export earnings were on a decline, the focus is on producer country exports in terms of their capacity to buy imports.
Keywords: supply management schemes; domestic producer price; world price; econometric models; regression equations; producer country exports; capacity to buy import
Chapter. 8067 words. Illustrated.
Subjects: Economic Development and Growth
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