The Interaction of Working and Speculative Commodity Stocks

Colin Carter and Cesar Revoredo Giha ()
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Cesar Revoredo Giha: Department of Land Economy, University of Cambridge, UK
Authors registered in the RePEc Author Service: Cesar Luis Revoredo Giha

No 03.2005, Environmental Economy and Policy Research Working Papers from University of Cambridge, Department of Land Economics

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: Commodity Markets; Inventories; Competitive Storage; Processing (search for similar items in EconPapers)
Date: 2005, Revised 2005
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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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