Replaced with revised version of paper 11/17/06. Former title: Forecasting Food Price Inflation, Challenges for Central Banks in Developing Countries using an Inflation Targeting Framework: the Case of Colombia

This paper studies the relative efficiency of two kinds of regulations, quantity restrictions (quotas) and output subsidies, in an imperfectly competitive market in the presence of two sources of uncertainty, costs and prices. We find that when these two sources of uncertainty are independently...