Gohin A., Chantret F. "The long run impact of energy prices on world food markets: The role of macro-economic linkages". Energy Policy, 38(1), 2010, pp. 333-339
Abstract: The world prices of food and energy products have followed similar large swings in recent
years. We investigate the long run relationship between these prices using a world Computable
General Equilibrium model with detailed representations of food and energy markets.
Particular attention is paid to specify macro-economic linkages which have often been overlooked
in recent analysis and debate. We find that the omission of these macro-economic
linkages has a substantial bearing on this relationship. A positive relationship due to the cost
push effect has been identified in most analysis, but we find that the introduction of the real
income effect may indeed imply a negative relationship between world food and energy
prices. Accordingly, it is crucial to move from a sector-focused analysis to a system wide
approach when analyzing the linkages between global energy and food markets.