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Title: |
Price and Inventory Dynamics of Primary
Commodities |
| Author: |
Antonini,
Alberto; Kwack, Sung Y. |
| Author
Affiliation: |
Columbia U;
Howard U |
| Source: |
International Economic Journal, Spring 1987, v. 1, no. 1, pp. 43-55 |
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Publication Date: |
Spring 1987 |
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Abstract: |
The paper develops a simple framework for
the analysis of price and inventory dynamics of primary commodities
under the assumption of rational expectations. The analysis shown that
if an unanticipated shock primarily affects the demand conditions for
inventories, the effect on prices is only temporary. However, when the
flow conditions of production and consumption are altered, the change in
price tends to become permanent. These results highlight the crucial
importance of identifying the markets which originate fluctuations in
prices when setting out policy measures to stabilize these fluctuations. |
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