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The Variability in Intertemporal Price Relationships for a Storable Commodity

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  • Elam, Emmett W.

Abstract

Holbrook Working believed that expectations should have no influence on intertemporal price spreads. This paper shows that Working's conclusion is not always correct. Indeed, it is shown that the effect of changing expectations on intertemporal price relationships depends upon the slope of the supply of storage function. As the slope increases, variability in the intertemporal price spread increases. Empirical results using the May/July wheat spread verified these conclusions.

Suggested Citation

  • Elam, Emmett W., 1984. "The Variability in Intertemporal Price Relationships for a Storable Commodity," 1984 Annual Meeting, August 5-8, Ithaca, New York 278935, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    • Handle: RePEc:ags:aaea84:278935
    DOI: 10.22004/ag.econ.278935
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    References listed on IDEAS

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    1. Nicholas Kaldor, 1939. "Speculation and Economic Stability," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 7(1), pages 1-27.
    2. William G. Tomek & Roger W. Gray, 1970. "Temporal Relationships Among Prices on Commodity Futures Markets: Their Allocative and Stabilizing Roles," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 52(3), pages 372-380.
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