Commodity, Futures and Financial Markets
Springer Science & Business Media, Nov 30, 1990 - Business & Economics - 301 pages
Louis Phlips The stabilisation of primary commodity prices, and the related issue of the stabilisation of export earnings of developing countries, have traditionally been studied without reference to the futures markets (that exist or could exist) for these commodities. These futures markets have in turn been s~udied in isolation. The same is true for the new developments on financial markets. Over the last few years, in particular sine the 1985 tin crisis and the October 1987 stock exchange crisis, it has become evident that there are inter actions between commodity, futures, and financial markets and that these inter actions are very important. The more so as trade on futures and financial markets has shown a spectacular increase. This volume brings together a number of recent and unpublished papers on these interactions by leading specialists (and their students). A first set of papers examines how the use of futures markets could help stabilising export earnings of developing countries and how this compares to the rather unsuccessful UNCTAD type interventions via buffer stocks, pegged prices and cartels. A second set of papers faces the fact, largely ignored in the literature, that commodity prices are determined in foreign currencies, with the result that developing countries suffer from the volatility of exchange rates of these currencies (even in cases where commodity prices are relatively stable). Financial markets are thus explicitly linked to futures and commodity markets.
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adjustment agents agricultural Allaz analysis Anderson assumed assumption bank accepted bills basis risk Bayesian error buffer stock buyer cartel cash market coefficient Coffee commodity markets competitive consumers consumption copper price correlation costs Cournot currency decisions depends deviation dollar dominant producer durable dynamic earnings Economic effect elasticities equation estimated exchange rate exercise price export firm forecast error forward function futures contracts futures market futures position futures price futures sales futures trading Gilbert implies instability interest rate interventions inventories Japanese yen Journal LDCs marginal market power Markov equilibrium monopolist Newbery nonrenewable resource oligopolists optimal hedging option output parameter perfect competition perfect foresight period of commitment price stabilization producer's profits rational expectations reduce revenue Ridler-Yandle risk aversion risk premium rubber sell share price index shock speculators spot market spot price stabilisation storable storage tariff trading futures uncertainty variability variance volatility welfare loss World Bank Zambia zero