Do natural rubber price bubbles occur?

Chi-Wei Su, Lu Liu, Ran Tao and Oana-Ramona Lobonţ
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Chi-Wei Su: School of Economics, Qingdao University, Qingdao, China
Lu Liu: Department of Finance, Ocean University of China, Qingdao, China
Ran Tao: Technological Center, Qingdao Municipal Center for Disease Control & Preventation, Qingdao, China
Oana-Ramona Lobonţ: Department of Finance, West University of Timisoara, Timisoara, Romania

Agricultural Economics, 2019, vol. 65, issue 2, 67-73

Abstract: In this paper, we employ the Generalized Supremum Augmented Dickey-Fuller test in order to identify the existence of multiple bubbles in natural rubber. This approach is practical for the using of time series and identifies the beginning and end points of multiple bubbles. The results reveal that there are five bubbles, where exist the divergences between natural rubber prices and their basic values on account of market fundamentals. The five bubbles are related to imbalance between supply and demand, inefficiencies of smallholders market, oil prices, exchange rate and climatic changes through analyses. Thus, the corresponding authorities are supposed to identify bubbles and consider their evolutions, which is beneficial to the stability of natural rubber price.

Keywords: bubbles; Generalized Supremum Augmented Dickey-Fuller test (GSADF); natural rubber price (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:caa:jnlage:v:65:y:2019:i:2:id:151-2018-agricecon

DOI: 10.17221/151/2018-AGRICECON

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