U.S. Ethanol Demand and World Hunger: Is There Any Connection?

U.S. ethanol expansion objectives are to improve both energy security and the environmental. However, this expansion has raised issues concerning its detrimental impacts on the price volatility of developing countries’ agricultural commodities. These concerns are addressed by empirically investigating the relations among U.S. ethanol and corn markets with developing countries’ corn prices. Results indicate that U.S. ethanol demand impacts on developing countries’ corn prices vary by country. Further, results reveal that the transmission effects of U.S. ethanol shocks are systematically stronger for countries with higher food import dependency and U.S. food aid