THE INTERACTION OF WORKING AND SPECULATIVE COMMODITY STOCKS

Colin Carter and Cesar Revoredo-Giha

No 31931, Environmental Economy and Policy Research Discussion Papers from University of Cambridge, Department of Land Economy

Abstract: This paper models the interaction of working (also called pipeline) and speculative commodity stocks. We model working inventories (i.e., raw material inventories carried by processors) based on Ramey's (1989) model of inventories as factors of production, which allows us to represent storage under inter-temporal price backwardation, observed in commodity markets. We incorporate both speculative and working stocks in a simple model to analyze the interaction and to simulate the relationship between inter-temporal commodity price spreads and stocks. Our model replicates common price patters found in commodity markets.

Keywords: Demand and Price Analysis; Industrial Organization (search for similar items in EconPapers)
Pages: 28
Date: 2005
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https://ageconsearch.umn.edu/record/31931/files/dp050003.pdf (application/pdf)

Related works:
Working Paper: The Interaction of Working and Speculative Commodity Stocks (2005)
Working Paper: The Interaction of Working and Speculative Commodity Stocks (2000)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:ucamdp:31931

DOI: 10.22004/ag.econ.31931

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