Are there periodically collapsing bubble behaviours in the global coffee market?
Ran Tao and
Agrekon, 2020, vol. 59, issue 1, 65-77
This paper investigates price bubbles in the global coffee market using the generalised supremum augmented Dickey-Fuller test. This approach can recognise multiple bubbles and date their origination and termination. The empirical results show that three bubbles existed in the coffee market from January 1990 to September 2017, during which the coffee price deviated from its fundamental value. Mismatch between supply and demand, speculation, US dollar fluctuations and climate change are applied to explain these bubbles. Corresponding policies, such as the prevention of pests and disease, emergency assistance, market structure improvement and recognition of US dollar fluctuations, should be emphasised to relieve the negative impacts of excessive coffee price volatility.
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Persistent link: https://EconPapers.repec.org/RePEc:taf:ragrxx:v:59:y:2020:i:1:p:65-77
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