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© 1985 Oxford University Press and the Foundation for the European Review of Agricultural Economics

other

Imperfect transmission of policy prices

DAVID COLMAN

Department of Agricultural Economics University of Manchester U.K.

Summary

It is commonly assumed that changes in agricultural policy prices cause equal changes in wholesale and producer prices. In other words, there is ‘perfect transmission’ of policy prices. This paper sets out reasons why such perfect transmission does not occur in practice. Econometric results for UK feed-cereal prices support the argument.


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