A Simulation Model of the World Rice Economy With Special Reference to Thailand

Sarkar, Hiren
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Computer simulation provides a useful tool to investigate alternative economic scenarios. In the present study, an attempt has been made to simulate a rice trade model with special reference to Thailand. An aggregative model is used in which the world is divided into two groups: (a) exporters and (b) importers. It is assumed that the importing group operates under constraints of resource restrictions and population pressure. Hence, there is very little opportunity for production adjustment. The exporting group is considered to have considerable surplus production capacity and is price responsive. Thailand is treated as a member of the exporting group, and a submodel for Thailand has been constructed with linkages to the main model. A set of structural equations is estimated and used to construct a recursive simulation model. Short period predictions of variables such as trade and export prices are made. A simple stochastic version of the simulation model also is formulated and used for prediction purposes. For Thailand, a number of policies are analyzed within the framework of a simulation experiment. A package program of the simulation method also is provided for convenience.