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Journal Article
Did speculation drive oil prices? market fundamentals suggest otherwise
Oil market speculation became an especially popular topic when the price of crude tripled over 18 months to a record high $145 per barrel in July 2008. Of particular interest to many is whether speculators drove oil prices beyond what fundamentals would have otherwise justified. We explore this issue over two Economic Letters. In this article, we look at evidence from the physical market for oil and conclude that fundamentals, and not speculation, were behind the dramatic rise and fall in oil prices. In our companion Economic Letter, we examine the futures market.
Journal Article
Market expectations and corn prices: looking into future to explain present
Market expectations of future supply and demand are important in determining current prices for agricultural products such as corn, which are harvested annually and stored for later use. Prices can quickly move when beliefs change?due to new data, for example?even if events far in the future are involved.
Journal Article
Commodity supplies and prices
Journal Article
Minding the speed limit
Journal Article
Diamonds and water: a paradox revisited
Journal Article
Why small businesses were hit harder by the recent recession
Although both large and small businesses felt the sting of job losses during the 2007-09 downturn, small firms experienced disproportionate declines. A study of the recession?s employment effect on small firms suggests that poor sales and economic uncertainty were the main reasons for their weak performance and sluggish recovery?problems that affected large firms too, but to a lesser degree. Although a tightened credit supply constrained some small firms, weak consumer demand for the firms? products and services was a more pressing factor, reducing revenues and dampening new investment ...
Journal Article
Supply shocks and the distribution of price changes
Since the early 1970s, economists have gained an increased appreciation for the importance of supply shocks as sources of fluctuations in aggregate economic activity. Yet the question of how best to measure such shocks remains open. Traditionally, economists have assessed the importance of such shocks by looking at such things as the relative prices of oil or agricultural commodities. Recently, however, it has been suggested that changes in the distribution of price changes for individual commodities may, in fact, be a superior indicator of changes in aggregate supply conditions. In this ...
Conference Paper
An income expenditure version of the wedge model
Journal Article
Happy hour economics, or how an increase in demand can produce a decrease in price
The standard supply-and-demand model is typically an economist?s most important analytical tool, but in some situations it does not capture the features of interest. For example, during ?happy hour,? bars near workplaces sell a higher-than-usual quantity of alcoholic beverages at a lower-than-usual price. This practice makes little sense using the standard competitive model, but an alternative model?the model of monopolistic competition?provides the needed analytic framework. ; This article provides a step-by-step construction of a monopolistic competition model in which many firms each ...