Storage and Commodity Markets is primarily a work of economic theory, concerned with how the capability to store a surplus affects the prices and production of commodities. Its focus on the behaviour, over time, of aggregate stockpiles provides insights into such questions as how much a country should store out of its current supply of food considering the uncertainty in future harvests. Related topics covered include whether storage or international trade is a more effective buffer and whether stockpiles are more useful in raw or processed form. Several chapters are devoted to analysing such government programmes as price bands, buffer stocks, and strategic reserves. This material is in the domain of applied welfare analysis with public finance. Because the theory presented is sufficiently general, it should be of interest to macroeconomists studying aggregate inventories or savings and to those in operations research studying inventory and pricing policies of large firms.
• Looks at how the capability to store surplus affects the prices and production of commodities • Looks at issues like stockpiles, food supplies, strategic reserves, and the futures market
Preface; Acknowledgments; 1. Introduction; Part I. The Basic Model: 2. Competitive equilibrium with storage; 3. Solving for the storage equilibrium Appendix: Numerical solution of the storage model; 4. The effects of storage on production, consumption, and prices; 5. Convergence to the steady state; Part II. Implications Of Storage For Reasearch On Time Series: 6. Time-series properties due to storage; 7. Test of rationality; Part III. Extensions Of The Model: 8. The market's reaction to news; 9. The interaction of storage and trade; 10. Inventories of raw materials, finished goods, and goods in process; 11. Market power and storage; Part IV. Public Interventions: 12. Welfare analysis of market stabilization; 13. Floor-price schemes; 14. Public storage under price bands and price pegs; 15. Public policies to supplement private storage; Part V. Epilogue: 16. Lessons about commodity markets and modeling strategies; References; Author index; Subject index.