Dynamic Impacts of a Catastrophic Production Event: The Foot-and-Mouth Disease Case
| Autor: | Alexandre Cordier, Jean Gohin, Arnaud Rault, Stéphane Krebs |
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| Rok vydání: | 2012 |
| Předmět: |
2. Zero hunger
Stylized fact Actuarial science Event (relativity) media_common.quotation_subject 05 social sciences Outbreak Monetary economics Economic surplus Bankruptcy Physiology (medical) 0502 economics and business Economics Production (economics) Bond market 050202 agricultural economics & policy 050207 economics Safety Risk Reliability and Quality Welfare media_common |
| Zdroj: | Risk Analysis. 33:480-492 |
| ISSN: | 0272-4332 |
| Popis: | In foot-and-mouth disease (FMD) free countries, the occurrence of an FMD outbreak is a rare event with potentially large economic losses. We explore the dynamic effects of an FMD outbreak on market variables and economic surplus taking into account the largely neglected issue of farm bankruptcy. Simulations are performed on a stylized agricultural economy, which is a net exporter before the outbreak. We find complex dynamic market effects when the farm credit market suffers from information imperfections leading to farm closure. Welfare effects are also dramatically altered. Domestic consumers may lose in the long run from an FMD outbreak because domestic supply contracts. On the other hand, farmers able to resist this event may ultimately gain. Our analysis also shows that these effects are not monotone, making any efficient policy response to this catastrophic event quite challenging. |
| Databáze: | OpenAIRE |
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