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International Finance Discussion Papers - Commodity Price Movements in a General Equilibrium Model of Storage (Paperback) Loot Price: R313 Discovery Miles 3 130
International Finance Discussion Papers - Commodity Price Movements in a General Equilibrium Model of Storage (Paperback):...
International Finance Discussion Papers - Commodity Price Movements in a General Equilibrium Model of Storage (Paperback):...

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International Finance Discussion Papers - Commodity Price Movements in a General Equilibrium Model of Storage (Paperback)

David M. Arseneau, Sylvain Leduc; Created by United States Federal Reserve Board

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Loot Price R313 Discovery Miles 3 130

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We embed the canonical rational expectations competitive storage model into a general equilibrium framework thereby allowing the non-linear commodity price dynamics implied by the competitive storage model to interact with the broader macroeconomy. Our main result is that the endogenous movement in interest rates implied under general equilibrium enhances the effects of competitive storage on commodity prices. Compared to a model in which the real interest rate is fixed, we find that storage in general equilibrium leads to more persistence in commodity prices and somewhat lower volatility. Moreover, the frequency of stockouts is lower in general equilibrium. A key mechanism driving this result is a link between the ability of the household to smooth consumption over time and the level of storage in the stochasic equilibrium. Finally, the model is used to examine the macroeconomic effects of both biofuel subsidies for ethanol producers and, separately, subsidies designed to insulate households from high food prices.

General

Imprint: Bibliogov
Country of origin: United States
Release date: February 2013
First published: February 2013
Authors: David M. Arseneau • Sylvain Leduc
Creators: United States Federal Reserve Board
Dimensions: 246 x 189 x 2mm (L x W x T)
Format: Paperback - Trade
Pages: 42
ISBN-13: 978-1-288-72359-1
Barcode: 9781288723591
Categories: Books > Social sciences > Politics & government
Books > Social sciences > Politics & government > General
LSN: 1-288-72359-8

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