Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/109504
Authors: 
Varela, Gonzalo J.
Taniguchi, Kiyoshi
Year of Publication: 
2014
Series/Report no.: 
ADB Economics Working Paper Series 394
Abstract: 
Data indicate that its domestic price in Indonesia has been increasing regardless of movements in the international price of wheat. A test for asymmetric price transmission from international wheat to domestic wheat flour markets is conducted using an error correction model and find the presence of asymmetric price transmission. The upward adjustment in the domestic price of wheat flour is much faster than its adjustment downward when it deviates from long-run equilibrium. Our results are robust to use of disaggregated data as well as to inclusion of additional of control variables such as prices of other inputs. We argue that asymmetric transmission occurs due to market concentration of wheat flour milling. We offer some policy suggestions for correcting these.
Subjects: 
spatial integration
asymmetric price transmission
monopolistic competition
commodity prices
agricultural market
wheat flour
JEL: 
F12
L11
Q11
Q13
Q17
Persistent Identifier of the first edition: 
Creative Commons License: 
http://creativecommons.org/licenses/by/3.0/igo
Document Type: 
Working Paper

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