Price stabilization using buffer stocks
AbstractThe price stabilization problem is stated and solved for a nonlinear cobweb model with government stocks. It is shown that if the storage capacity for the commodity is sufficiently large then there exists a simple stabilization policy, called the 'keep supply at equilibrium (KSE)' policy, such that the equilibrium price is a global attractor for the corresponding closed-loop system. In addition, it is shown that if the government approximates the equilibrium supply with the average supply, stabilization is guaranteed. We refer to this policy as 'keep supply at average (KSA)'.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by Elsevier in its journal Journal of Economic Dynamics and Control.
Volume (Year): 32 (2008)
Issue (Month): 4 (April)
Contact details of provider:
Web page: http://www.elsevier.com/locate/jedc
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.:
- Wright, Brian D & Williams, Jeffrey C, 1982. "The Economic Role of Commodity Storage," Economic Journal, Royal Economic Society, vol. 92(367), pages 596-614, September.
- Hommes, Cars H., 1994. "Dynamics of the cobweb model with adaptive expectations and nonlinear supply and demand," Journal of Economic Behavior & Organization, Elsevier, vol. 24(3), pages 315-335, August.
- Artstein, Zvi, 1983. "Irregular cobweb dynamics," Economics Letters, Elsevier, vol. 11(1-2), pages 15-17.
- Hommes, Cars H., 1998. "On the consistency of backward-looking expectations: The case of the cobweb," Journal of Economic Behavior & Organization, Elsevier, vol. 33(3-4), pages 333-362, January.
- Hommes, Cars & Sonnemans, Joep & Tuinstra, Jan & Van De Velden, Henk, 2007.
"Learning In Cobweb Experiments,"
Cambridge University Press, vol. 11(S1), pages 8-33, November.
- C.H. Hommes & J.H. Sonnemans & J. Tuinstra & H. van de Velde, 2003. "Learning in Cobweb Experiments," Tinbergen Institute Discussion Papers 03-020/1, Tinbergen Institute.
- Hommes, C.H. & Sonnemans, J. & Tuinstra, J. & Velden, H. van de, 2002. "Learning in Coweb Experiments," CeNDEF Working Papers 02-06, Universiteit van Amsterdam, Center for Nonlinear Dynamics in Economics and Finance.
- Lasselle, Laurence & Svizzero, Serge & Tisdell, Clem, 2005.
"Stability And Cycles In A Cobweb Model With Heterogeneous Expectations,"
Cambridge University Press, vol. 9(05), pages 630-650, November.
- Laurence Lasselle & Serge Svizzero & Clem Tisdell, 2007. "Stability and Cycles in a Cobweb Model with Heterogeneous Expectations," CDMA Working Paper Series 200706, Centre for Dynamic Macroeconomic Analysis.
- Laurence LASSELLE & Serge SVIZZERO & Clem TISDELL, 2004. "Stability and Cycles in a Cobweb Model with Heterogeneous Expectations," Economics Working Papers ECO2004/03, European University Institute.
- Carl Chiarella & Xue-Zhong He, 2001.
"Dynamics of Beliefs and Learning Under aL Processes - The Heterogeneous Case,"
Research Paper Series
55, Quantitative Finance Research Centre, University of Technology, Sydney.
- Chiarella, Carl & He, Xue-Zhong, 2003. "Dynamics of beliefs and learning under aL-processes -- the heterogeneous case," Journal of Economic Dynamics and Control, Elsevier, vol. 27(3), pages 503-531, January.
- Akio Matsumoto, 1998. "Do Government Subsidies Stabilize Or Destabilize Agricultural Markets?," Contemporary Economic Policy, Western Economic Association International, vol. 16(4), pages 452-466, October.
- Brennan, Donna, 2003. "Price dynamics in the Bangladesh rice market: implications for public intervention," Agricultural Economics, Blackwell, vol. 29(1), pages 15-25, July.
- Van Groenendaal, W. J. H. & Vingerhoets, J. W. A., 1995.
"Can international commodity agreements work?,"
Journal of Policy Modeling,
Elsevier, vol. 17(3), pages 257-278, June.
- John Conlisk, 1996. "Why Bounded Rationality?," Journal of Economic Literature, American Economic Association, vol. 34(2), pages 669-700, June.
- He, Xue-Zhong & Westerhoff, Frank H., 2005.
"Commodity markets, price limiters and speculative price dynamics,"
Journal of Economic Dynamics and Control,
Elsevier, vol. 29(9), pages 1577-1596, September.
- Xue-Zhong He & Frank H. Westerhoff, 2004. "Commodity Markets, Price Limiters and Speculative Price Dynamics," Research Paper Series 136, Quantitative Finance Research Centre, University of Technology, Sydney.
- Boussard, Jean-Marc, 1996. "When risk generates chaos," Journal of Economic Behavior & Organization, Elsevier, vol. 29(3), pages 433-446, May.
- Simonovits, A, 1991. " Investment Limit Cycles in a Socialist Economy," Economic Change and Restructuring, Springer, vol. 24(1), pages 27-46.
- Gallas, Jason A. C. & Nusse, Helena E., 1996. "Periodicity versus chaos in the dynamics of cobweb models," Journal of Economic Behavior & Organization, Elsevier, vol. 29(3), pages 447-464, May.
- Onozaki, Tamotsu & Sieg, Gernot & Yokoo, Masanori, 2003. "Stability, chaos and multiple attractors: a single agent makes a difference," Journal of Economic Dynamics and Control, Elsevier, vol. 27(10), pages 1917-1938, August.
- Chavas, Jean-Paul, 2000. "On information and market dynamics: The case of the U.S. beef market," Journal of Economic Dynamics and Control, Elsevier, vol. 24(5-7), pages 833-853, June.
- Hommes, Cars H., 1991. "Adaptive learning and roads to chaos : The case of the cobweb," Economics Letters, Elsevier, vol. 36(2), pages 127-132, June.
- Miranda, Mario J & Helmberger, Peter G, 1988. "The Effects of Commodity Price Stabilization Programs," American Economic Review, American Economic Association, vol. 78(1), pages 46-58, March.
- Arzac, Enrique R., 1979. "An Econometric Evaluation Of Stabilization Policies For The U.S. Grain Market," Western Journal of Agricultural Economics, Western Agricultural Economics Association, vol. 4(01), July.
- Hommes, Cars H. & Nusse, Helena E. & Simonovits, Andras, 1995. "Cycles and chaos in a socialist economy," Journal of Economic Dynamics and Control, Elsevier, vol. 19(1-2), pages 155-179.
- Ingrid Kubin & Laura Gardini, 2013.
"Border collision bifurcations in boom and bust cycles,"
Journal of Evolutionary Economics,
Springer, vol. 23(4), pages 811-829, September.
- Ingrid Kubin & Laura Gardini, 2012. " Border Collision Bifurcations in Boom and Bust Cycles," Department of Economics Working Papers wuwp137, Vienna University of Economics, Department of Economics.
- Sophie Mitra & Jean‐Marc Boussard, 2012.
"A simple model of endogenous agricultural commodity price fluctuations with storage,"
International Association of Agricultural Economists, vol. 43(1), pages 1-15, 01.
- Sophie Mitra & Jean-Marc Boussard, 2011. "A Simple Model of Endogenous Agricultural Commodity Price Fluctuations with Storage," Fordham Economics Discussion Paper Series dp2011-05, Fordham University, Department of Economics.
- Karafyllis, Iasson & Jiang, Zhong-Ping & Athanasiou, George, 2010. "Nash Equilibrium and Robust Stability in Dynamic Games: A Small-Gain Perspective," MPRA Paper 26890, University Library of Munich, Germany, revised 23 Sep 2010.
- Hwang, Tsorng-Chyi & Chen, Meng-Gu & Chang, Chia-Lin, 2010. "Price Stabilization in the Taiwan Hog and Broiler Industries: Evidence from a STAR Approach," MPRA Paper 15552, University Library of Munich, Germany.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.