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The Effects of Higher Commodity Prices and Tax Changes on the Honduran Economy

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Analyzes the effects of higher international commodity prices and taxes on the Honduran economy using a dynamic recursive computable general equilibrium (CGE) model.
creator Daniel Isaac
creator Garcia
creator Garcia, Daniel Isaac
Title The Effects of Higher Commodity Prices and Tax Changes on the Honduran Economy
advisor John H.
advisor Mutti
advisor Mutti, John "Jack" H.
description This paper analyzes the effects of higher international commodity prices and taxes on the Honduran economy using a dynamic recursive computable general equilibrium (CGE) model developed by the International Food Policy Research. By allowing for labor force growth, productivity growth, and capital accumulation the model describes the changes that need to happen to maintain equilibrium in the Honduran economy over the course of 10 years.
Topic Mentored Advanced Project
Identifier (local) grinnell:10758
Identifier (hdl) http://hdl.handle.net/11084/10758
Group Record
creator Daniel Isaac
creator Garcia
creator Garcia, Daniel Isaac
Title The Effects of Higher Commodity Prices and Tax Changes on the Honduran Economy
advisor John H.
advisor Mutti
advisor Mutti, John "Jack" H.
supporting host Grinnell College. Economics Department.
Index Date 2011
Date Created 2011-11
Publisher Grinnell College
Type of Resource text
Genre research paper
Digital Extent 22 pages
Digital Origin born digital
Extent 16 pages
Media Type application/pdf
description This paper analyzes the effects of higher international commodity prices and taxes on the Honduran economy using a dynamic recursive computable general equilibrium (CGE) model developed by the International Food Policy Research. By allowing for labor force growth, productivity growth, and capital accumulation the model describes the changes that need to happen to maintain equilibrium in the Honduran economy over the course of 10 years. The first set of simulations consists of a 50% increase in the international export prices of cagex (palm oil, sugarcane, bananas, shrimp, fish and other seafood, and vegetables), ccoff (coffee berries and beans), and cpfood (processed food products such as beef, sugar, rice, tobacco, alcohol, flour, beef, etc) and a 50% increase in the import prices of cchem (oil) and cagric (corn, beans, cereal, unprocessed tobacco and tobacco leaves, and wood derivatives). All else equal, average GDP growth is higher by .09, .04, and .04 percentage points each year due to the rise in the export prices of cagex, cpfood, and ccoff. The benefits are small because higher export prices increase the value of the currency, thereby lowering the international competitiveness of other export sectors. The textile sector, which constitutes nearly half of total exports, is damaged the most. When the international import prices of cagric and cchem are increased by 50%, average GDP growth is annually lower by .04 and .37 percentage points.
Language English
Topic Economic aspects
Topic Commodity exchanges
Topic Commodity control
Topic Agriculture
Geographic Honduras
Related Item Digital Grinnell
Related Item Mentored Advanced Project
Related Item Student Scholarship
Identifier (local) grinnell:123
Access Condition Copyright to this work is held by the author(s), in accordance with United States copyright law (USC 17). Readers of this work have certain rights as defined by the law, including but not limited to fair use (17 USC 107 et seq.).
Identifier (hdl) http://hdl.handle.net/11084/123
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