A spatial equilibrium analysis of trade policy reforms on the world wheat market

Antonio G. Gómez-Plana, Stephen Devadoss

Research output: Contribution to journalArticlepeer-review

14 Scopus citations


Since a few countries produce most of the world's wheat, and consumption is widespread across the world, wheat is one of the most commonly traded agricultural commodities. In recent years, the wheat market has been going through difficult phases as wheat prices are depressed. The fall in wheat prices is attributed to a supply glut and restrictive trade barriers. This study develops a large-scale spatial equilibrium trade model for wheat to analyse the effects of removing trade barriers (tariffs and subsidies) on each country's/region's price, supply, demand, trade, welfare, and bilateral trade flows. The results show that trade liberalization leads to an increase (decrease) in prices in the exporting (importing) countries. Production and exports increase in the exporting country, and consumption and imports increase in the importing country. Consequently, the volume of trade also increases. The welfare of most countries rises, and thus, world welfare also rises.

Original languageEnglish
Pages (from-to)1643-1648
Number of pages6
JournalApplied Economics
Issue number15
StatePublished - Aug 20 2004


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