Speculation and Economic Stability

N. Kaldor

Chapter 5 in The Economics of Futures Trading, 1976, pp 111-123 from Palgrave Macmillan

Abstract: Abstract The purpose of the following paper is to examine, in the light of recent doctrines, the effects of speculation on economic stability. Speculation, for the purposes of this paper, may be defined as the purchase (or sale) of goods with a view to re-sale (re-purchase) at a later date, where the motive behind such action is the expectation of a change in the relevant prices relatively to the ruling price and not a gain accruing through their use, or any kind of transformation effected in them or their transfer between different markets. Thus, while merchants and other dealers do make purchases and sales which might be termed ‘speculative’, their ordinary transactions do not fall within this category. What distinguishes speculative purchases and sales from other kinds of purchases and sales is the expectation of an impending change in the ruling market price as the sole motive of action. Hence ‘speculative stocks’ of anything may be defined as the difference between the amount actually held and the amount that would be held if, other things being the same, the price of that thing were expected to remain unchanged; and they can be either positive or negative.1

Keywords: Risk Premium; Future Price; Current Price; Economic Stability; Spot Price (search for similar items in EconPapers)
Date: 1976
References: Add references at CitEc
Citations: View citations in EconPapers (4)

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-1-349-02693-7_6

Ordering information: This item can be ordered from
http://www.palgrave.com/9781349026937

DOI: 10.1007/978-1-349-02693-7_6

Access Statistics for this chapter

More chapters in Palgrave Macmillan Books from Palgrave Macmillan
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().