A Theoretical Discussion Of The Economic Effects Of Buffer Stocks And Buffer Funds
AbstractIt has been established that the absence of risk markets justifies market intervention in principle. The form of intervention that has been discussed most widely in the literature is the buffer stock. This paper points out that other forms of intervention, specifically buffer funds, are likely to perform better. The analysis shows that buffer funds are likely to outperform buffer stocks because they address market failure more directly. A sub-theme developed in this paper is that since buffer funds are enforced saving, it follows that policies that address capital market failure are likely to dominate buffer funds and buffer stocks in welfare terms.
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Bibliographic InfoArticle provided by Australian Agricultural and Resource Economics Society in its journal Australian Journal of Agricultural Economics.
Volume (Year): 32 (1988)
Issue (Month): 02-03 ()
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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Kawai, Masahiro, 1983. "Price Volatility of Storable Commodities under Rational Expectations in Spot and Futures Markets," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 24(2), pages 435-59, June.
- Salant, Stephen W, 1983. "The Vulnerability of Price Stabilization Schemes to Speculative Attack," Journal of Political Economy, University of Chicago Press, vol. 91(1), pages 1-38, February.
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