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An Economic Analysis Of Stabilizing Schemes

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  • Subotnik, Abraham
  • Houck, James P.

Abstract

The main purpose of this paper is to analyze the welfare implications of stabilizing consumption and production and to compare it with the already-known welfare implications of stabilizing prices. Two sets of assumptions regarding supply behavior will be considered: (1) supply reacts instantaneously to a change in market prices, (2) producers react to changes in expected prices and expectations are "rational" within the context developed by J.F. Muth.

Suggested Citation

  • Subotnik, Abraham & Houck, James P., 1975. "An Economic Analysis Of Stabilizing Schemes," Staff Papers 13643, University of Minnesota, Department of Applied Economics.
    • Handle: RePEc:ags:umaesp:13643
    DOI: 10.22004/ag.econ.13643
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    File URL: https://ageconsearch.umn.edu/record/13643/files/p75-05.pdf
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    References listed on IDEAS

    as
    1. Frederick V. Waugh, 1944. "Does the Consumer Benefit from Price Instability?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 58(4), pages 602-614.
    2. Stephen J. Turnovsky, 1974. "Price Expectations and the Welfare Gains from Price Stabilization," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 56(4), pages 706-716.
    3. Darrell Hueth & Andrew Schmitz, 1972. "International Trade in Intermediate and Final Goods: Some Welfare Implications of Destabilized Prices," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 86(3), pages 351-365.
    4. Benton F. Massell, 1969. "Price Stabilization and Welfare," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 83(2), pages 284-298.
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