Storage and the Volatility of Agricultural Prices: A Model of Endogenous Fluctuations
AbstractRecent developments in world food markets stress the importance of identifying the sources of food price volatility. This paper develops a nonlinear Cobweb model with endogenous volatility which accounts for several characteristics of agricultural commodity markets (seasonality, storage) and leads to price series with positive skewness and autocorrelation, as in actual commodity prices. Practical consequences may imply a rethinking of the current methods of world food market regulation.
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Bibliographic InfoPaper provided by Fordham University, Department of Economics in its series Fordham Economics Discussion Paper Series with number dp2008-11.
Date of creation: 2008
Date of revision:
Agricultural prices; nonlinear Cobweb model; endogenous fluctuations; storage;
Find related papers by JEL classification:
- Q11 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Aggregate Supply and Demand Analysis; Prices
- E39 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Other
- D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations
This paper has been announced in the following NEP Reports:
- NEP-AGR-2008-07-30 (Agricultural Economics)
- NEP-ALL-2008-07-30 (All new papers)
- NEP-MAC-2008-07-30 (Macroeconomics)
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