ABSTRACT
In early discussions of the 1985 U.S. farm bill, two issues often came up. The first was concerned with the most likely price response in other countries to a change in the United States export price. If we define the U.S. Gulf port price as the world price, this issue could be addressed by simply comparing changes in other countries prices to a U.S. price change. The second issue concerned supply response to changing world prices. This can be addressed by studying changes in a country's domestic price to a changes in world prices through a price transmission equation and in turn the impact on a country's supply of a commodity.
