Monday, 14 April 2008

Food prices (updated) x3

Earlier I blogged on the price of rice in Asia. I now see that Gary Becker is discussing Rising Food Prices and Public Policy. Richard Posner comments on Food Prices and Malthusian Economics.

Update: Michael Giberson at Knowledge Problem comments on Becker and Posner on food prices and the new Neo-Malthusians.

Update 2: At Economic Logic they are posting About the food price crisis. It is noted that
Some governments in developing economies have already taken actions: price controls and export restrictions. Great, exactly what they should not do, attacking the symptoms: prices are high, and local production can be sold at such prices elsewhere and gets exported. But the root of the problem that creates this discontent is the poverty, not the high prices. Thus the answer is some sort of income support.

Why should prices not be prevented to increase? Because this will spur production. As Zimbabwe is dramatically showing currently, price controls dry up the supply. Why should borders be kept open? For the same reason: it encourages production, plus brings income home.
Update 3: Addendum on Rising Food Prices by Gray Becker.

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