In fact, complex systems scientists from the New England Complex Systems
Institute have recently employed a very different methodology to estimate the impacts of
both ethanol expansion and financial speculation on corn prices. Drawing on a previously
published model that quantifies the contribution of those two factors to overall food price
movement in the last six years (Lagi, Bar-Yam et al. 2011), researchers scaled the model
to corn price movements and the impact on importing countries’ costs. For Mexico they
estimate that from 2003-4 to 2010-11 U.S. ethanol expansion cost Mexico about $3.2
billion, while financial speculation added another $1.4 billion to the country’s seven-year
corn import bill. They estimate that U.S. ethanol expansion raised prices and import costs
27% for the entire period, consistent with the range of estimates in the literature.
Financial speculation added another 13%, with the largest share coming in 2007-8 when,
according to their modeling, financial speculation alone increased prices and import costs
by 80% (Lagi, Gard-Murray et al. 2012).
In fact, complex systems scientists from the New England Complex SystemsInstitute have recently employed a very different methodology to estimate the impacts ofboth ethanol expansion and financial speculation on corn prices. Drawing on a previouslypublished model that quantifies the contribution of those two factors to overall food pricemovement in the last six years (Lagi, Bar-Yam et al. 2011), researchers scaled the modelto corn price movements and the impact on importing countries’ costs. For Mexico theyestimate that from 2003-4 to 2010-11 U.S. ethanol expansion cost Mexico about $3.2billion, while financial speculation added another $1.4 billion to the country’s seven-yearcorn import bill. They estimate that U.S. ethanol expansion raised prices and import costs27% for the entire period, consistent with the range of estimates in the literature.Financial speculation added another 13%, with the largest share coming in 2007-8 when,according to their modeling, financial speculation alone increased prices and import costsby 80% (Lagi, Gard-Murray et al. 2012).
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