Price Transmission in the Swiss Wheat Market: Does Sophisticated Border Protection Make the Difference?. Issue 2 (15th March 2018)

• Record Type: Journal Article
• Authors: Esposti, Roberto; Listorti, Giulia
• Is Part Of: International trade journal. Volume 32:Issue 2(2018)
• Page Start: 209
• Page End: 238
• Publication Date: 2018-03-15
• Subjects: Cointegration -- price bubbles -- price transmission -- trade policy; International trade -- Periodicals; Commerce -- Periodicals; International economic relations -- Periodicals; 382
• DOI: 10.1080/08853908.2017.1345668
• Languages: English
• ISSNs: 0885-3908

Abstract

ABSTRACT: This article discusses horizontal wheat price transmission from international markets to the domestic Swiss market. The Swiss case is peculiar due to the presence of different border policies segmenting the domestic wheat market according to its use: food or feed. Vector Error Correction (VEC) models with structural breaks are estimated. They account for these policy instruments and their adaptation during periods of market exuberance, and acknowledge linkages between the two market segments. Estimation results suggest that the border policy regime isolates the domestic wheat market for feed use, while, in the food case, the domestic price still responds to international markets.