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Clashing Analyses Of Speculation And The Early Regulation Of Us Futures Markets

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  • Berdell, John
  • Choi, Jin Wook

Abstract

This article examines the early regulation of futures markets in the 1920s and 1930s. We contrast the analysis of speculation developed by the Grain Futures Administration (GFA) with Holbrook Working’s. Within the GFA we focus on Paul Mehl, who directed the statistical analysis of order flows, trade volumes, and positions that supported the GFA’s policy recommendations. In retrospect Working was the most prominent academic analyst of futures markets. The relationship between the GFA and Working was complex and at times intimately collaborative, but the New Deal provoked sharp disagreement. Working rejected the tighter trading rules advocated by the GFA as counterproductive and tried to persuade the Secretary of Agriculture to embrace a discretionary approach to regulation based upon his analysis of neighboring futures prices (the Working curve) and his distinctive conception of “perfect markets”—a nuanced version of the subsequent efficient market hypothesis.

Suggested Citation

  • Berdell, John & Choi, Jin Wook, 2018. "Clashing Analyses Of Speculation And The Early Regulation Of Us Futures Markets," Journal of the History of Economic Thought, Cambridge University Press, vol. 40(4), pages 539-560, December.
    • Handle: RePEc:cup:jhisec:v:40:y:2018:i:04:p:539-560_00
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    Cited by:

    1. Kun Peng & Zhepeng Hu & Michel A. Robe, 2024. "Maximum order size and market quality: Evidence from a natural experiment in commodity futures markets," Journal of Futures Markets, John Wiley & Sons, Ltd., vol. 44(5), pages 803-825, May.
    2. Thomas Delcey & Guillaume Noblet, 2021. ""The Eyes and Ears of the Agricultural Markets": A History of Information in Interwar Agricultural Economics," Working Papers hal-03227973, HAL.
    3. Thomas Delcey, 2019. "Samuelson vs Fama on the Efficient Market Hypothesis: The Point of View of Expertise [Samuelson vs Fama sur l’efficience informationnelle des marchés financiers : le point de vue de l’expertise]," Post-Print hal-01618347, HAL.
    4. Thomas Delcey & Francesco Sergi, 2019. "The Efficient Market Hypothesis and Rational Expectations. How Did They Meet and Live (Happily?) Ever After," Working Papers hal-02187362, HAL.
    5. Thomas Delcey & Guillaume Noblet, 2021. ""The Eyes and Ears of the Agricultural Markets": A History of Information in Interwar Agricultural Economics," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-03227973, HAL.
    6. Thomas Delcey & Francesco Sergi, 2019. "The Efficient Market Hypothesis and Rational Expectations. How Did They Meet and Live (Happily?) Ever After," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-02187362, HAL.

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