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Informational Frictions and Commodity Markets / Michael Sockin, Wei Xiong.
- Format:
- Book
- Author/Creator:
- Sockin, Michael.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w18906.
- NBER working paper series no. w18906
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 2013.
- Summary:
- This paper develops a model to analyze information aggregation in commodity markets. Through centralized trading, commodity prices aggregate dispersed information about the strength of the global economy among goods producers whose production has complementarity, and serve as price signals to guide producers' production decisions and commodity demand. Our analysis highlights important feedback effects of informational noise originating from supply shocks and futures market trading on commodity demand and spot prices, which are ignored by existing empirical studies and policy discussions.
- Notes:
- Print version record
- March 2013.
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