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Überprüfung von Gültigkeit und Annahmen der Friedman These für Rohstoffmärkte


  • Maria Stückler

    () (Department of Economics, Vienna University of Economics & B.A.)


The Thesis: Commodity prices are significantly more volatile than prices of industrial products. Production as well as non speculative demand of raw materials are subject to stochastic - sometimes even systematic - fluctuations, which get translated into pronounced price fluctuations by low short run price elasticities of demand and supply. Unstable prices as such provide an incentive to speculate; and - so the Friedman thesis - profitable speculation in itself has a stabilizing effect, since "speculation can be destabilizing in general only if speculators on average sell when the currency is low in price and buy when it is high". Temporal independence between speculative and non speculative activities is the only necessary condition Friedman considers. The counter argument: As can be shown however, even under the assumption of temporal independence speculation can have a destabilizing effect despite being profitable, if the non speculative excess demand is nonlinear. Moreover its precisely because of temporal interdependence on commodity markets, that speculative profits can even be achieved by destabilizing (stable) prices. The extreme volatility of commodity prices therefore may be partly caused by (profitable) speculation as well.

Suggested Citation

  • Maria Stückler, 2002. "Überprüfung von Gültigkeit und Annahmen der Friedman These für Rohstoffmärkte," Department of Economics Working Papers wuwp079, Vienna University of Economics and Business, Department of Economics.
  • Handle: RePEc:wiw:wiwwuw:wuwp079 Note: PDF Document

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    References listed on IDEAS

    1. Kessides, Ioannis N. & Willig, Robert D., 1995. "Restructuring regulation of the rail industry for the public interest," Policy Research Working Paper Series 1506, The World Bank.
    2. Davidson, Russell & MacKinnon, James G., 1993. "Estimation and Inference in Econometrics," OUP Catalogue, Oxford University Press, number 9780195060119.
    3. Johansson, Per & Nilsson, Jan-Eric, 2004. "An economic analysis of track maintenance costs," Transport Policy, Elsevier, vol. 11(3), pages 277-286, July.
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    More about this item


    unstable commodity prices; Friedman thesis; speculation; stabilization; temporal independence;

    JEL classification:

    • Q00 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - General

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