Butter Mountains, Milk Lakes and optimal Price Limiters

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dc.contributor.author Corron, N en_US
dc.contributor.author He, Xuezhong en_US
dc.contributor.author Westerhoff, Frank en_US
dc.date.accessioned 2009-12-21T02:36:48Z
dc.date.available 2009-12-21T02:36:48Z
dc.date.issued 2007 en_US
dc.identifier 2006014051 en_US
dc.identifier.citation Corron N, He Xuezhong, and Westerhoff Frank 2007, 'Butter Mountains, Milk Lakes and optimal Price Limiters', Taylor and Francis, vol. 14, no. 15, pp. 1131-1136. en_US
dc.identifier.issn 1350-4851 en_US
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. en_US
dc.publisher Taylor and Francis en_US
dc.relation.isbasedon http://dx.doi.org/10.1080/13504850600606059 en_US
dc.title Butter Mountains, Milk Lakes and optimal Price Limiters en_US
dc.parent Applied Economic Letters en_US
dc.journal.volume 14 en_US
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 en_US
dc.personcode 0000026164 en_US
dc.personcode 010238 en_US
dc.personcode 0000022215 en_US
dc.percentage 100 en_US
dc.classification.name Financial Economics en_US
dc.classification.type FOR-08 en_US

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