Trading Suspensions and Food Price Inflation

Aggarwal, Nidhi, Chatterjee, Tirtha and Sehgal, Karan (2023) Trading Suspensions and Food Price Inflation. [Working papers (or Preprints)] (Submitted)

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Since the global food price inflation of 2008-09, concerns regarding futures market speculation and its impact on food prices have grown. Conflicting results from existing studies highlight the limitation of the research design (Cheng and Xiong, 2014). We apply the synthetic control methodology to examine if futures trading suspensions bring down food prices. Analysing three recent agri-futures trading suspensions events from India, we find no empirical evidence that such suspensions impact food prices. The counterfactual for each episode indicates that even in the absence of such suspensions, food prices would have followed a similar trend. Our findings inform the policy debate on agricultural market interventions related to derivatives trading.

Item Type: Working papers (or Preprints)
Keywords: food price inflation | agricultural derivatives | trading suspensions synthetic control | India
Subjects: Social Sciences and humanities > Economics, Econometrics and Finance > Economics
Social Sciences and humanities > Social Sciences > Social Sciences (General)
Social Sciences and humanities > Social Sciences > Public Policy
JGU School/Centre: Jindal School of Government and Public Policy
Depositing User: Arjun Dinesh
Date Deposited: 30 Apr 2023 17:56
Last Modified: 30 Apr 2023 17:56
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