Butter Mountains, Milk Lakes and optimal Price Limiters

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dc.contributor.author Corron, N
dc.contributor.author He, X
dc.contributor.author Westerhoff, FH
dc.date.accessioned 2009-12-21T02:36:48Z
dc.date.issued 2007-01
dc.identifier.citation Applied Economic Letters, 2007, 14 (15), pp. 1131 - 1136
dc.identifier.issn 1350-4851
dc.identifier.other C1 en_US
dc.identifier.uri http://hdl.handle.net/10453/5136
dc.description.abstract It is known that simple price limiters may have unexpected consequences in irregular commodity price fluctuations between bull and bear markets and complicated impacts on the size of buffer stocks. In particular, imposing a lower price boundary may lead to a huge buffer stock, e.g. to a butter mountain or a milk lake and this is a real problem for regulators since storage costs may become impossible to finance over time. The relation between price limiters and the size of buffer stocks is nontrivial and there may exist some optimal price limiters which require only weak market interventions and thus provide a rather inexpensive option to regulate commodity markets. In this article, we use a simple commodity market model to explore the relation between price limiters and the average growth rate of the buffer stocks. It is found that these optimal price limiter levels are simply the minimum values of unstable periodic orbits of the underlying deterministic system.
dc.publisher Taylor and Francis
dc.relation.isbasedon 10.1080/13504850600606059
dc.title Butter Mountains, Milk Lakes and optimal Price Limiters
dc.type Journal Article
dc.parent Applied Economic Letters
dc.journal.volume 15
dc.journal.volume 14
dc.journal.number 15 en_US
dc.publocation UK en_US
dc.identifier.startpage 1131 en_US
dc.identifier.endpage 1136 en_US
dc.cauo.name BUS.School of Finance and Economics en_US
dc.conference Verified OK en_US
dc.for 140207 Financial Economics
dc.personcode 010238
dc.percentage 100 en_US
dc.classification.name Financial Economics en_US
dc.classification.type FOR-08 en_US
pubs.embargo.period Not known
pubs.organisational-group /University of Technology Sydney
pubs.organisational-group /University of Technology Sydney/Faculty of Business
pubs.organisational-group /University of Technology Sydney/Faculty of Business/Finance
pubs.organisational-group /University of Technology Sydney/Strength - Quantitative Finance
utslib.copyright.status Closed Access
utslib.copyright.date 2015-04-15 12:17:09.805752+10
pubs.consider-herdc true
utslib.collection.history Closed (ID: 3)


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