Basis = price of hedged asset-price of hedging instrument problem of basis risk: uncertainties of processes describing the evolution of prices of asset and hedging instrument not identical, only highly correlated Example 1: weather derivatives hedged asset: heating oil sales, hedging instrument: HDD derivative HDD derivative: contract paying a premium in case HDD above a critical threshold Exam...

A computational model of a simple commodity economy is examined and a theory of the relationship between commodity values, market prices and the efficient division of social labour is developed. The main conclusions are: (i) the labour value of a commodity is an attractor for its market price; (ii) market prices are error signals that function to allocate the available social labour between sec...

An investigation of commercial engines with finite capacity lowand high-price economic subsystems and a generalized commodity transfer law [ ( ) m n P ∝ Δ ] in commodity flow processes, in which effects of the price elasticities of supply and demand are introduced, is presented in this paper. Optimal cycle configurations of commercial engines for maximum profit are obtained by applying optimal ...

nterest in commodity prices as indicators of consumer price inflation has ebbed and flowed with the rise and fall in commodity prices themselves. True to form, as commodity prices have surged in the last two years (Chart 1), interest in their predictive power has returned. Inflation hawks point to an outpouring of studies in the late 1980s showing a strong empirical connection between commodity...

Uncertainty makes economic and project management more difficult for any entity. This is especially true for sovereigns that have experienced substantial financial volatility and shocks throughout the nineties, especially those with substantial debt and commodity price exposures. Furthermore, the development of a strategic approach at the country level for the analysis of that uncertainty has l...

22.1 The existence of seasonal commodities poses some significant challenges for price statisticians. Seasonal commodities are commodities which are either: (a) not available in the marketplace during certain seasons of the year, or (b) are available throughout the year, but there are regular fluctuations in prices or quantities that are synchronized with the season or the time of the year. A c...

Uncertainty makes economic and project management more difficult for any entity. This is especially true for sovereigns that have experienced substantial financial volatility and shocks throughout the nineties, especially those with substantial debt and commodity price exposures. Furthermore, the development of a strategic approach at the country level for the analysis of that uncertainty has l...

This paper focuses on the determinants of aggregate investment spending in the UK for the industrial and commercial company (ICC) sector. It complements recent work by Cuthbertson and Gasparro (1995), who study an augmented Tobin’s q model of investment in the manufacturing sector. Important focal points of our analysis are a role for real profits (internal funds), which allow firms to combat l...

differing consumption patterns among individuals along with relative commodity price changes has made inflation effects differ from one person to another. on the other hand, inflation continues to be a general phenomenon in iranian economy. the impacts of price changes on rural poverty have been hereby investigated. for this, market price fluctuations in rural areas of fars province during the ...