It is argued that the vector space measures used to measure closeness of prices and labour values are invalid because of the observed metric of commodity space. An alternative vector space within which such measures do apply is proposed. It is shown that commodity exchange can be modeled by the application of unitary operators to this space. In the recent literature relating to measuring the cl...

e xchange rate is an important factor influencing price indices of exported goods of a country in different ways. imported intermediate commodity is one of the important ways by which the change in exchange rate affects price indices of the exported goods. using the input-output table of iran for the year 2001, this paper investigates the impact of exchange rate devaluation on price indices of ...

This paper implements a pricing procedure for commodity options, taking into account the stochastic nature of spot prices, currency exchange rates and convenience yields. Interest rate risk is also mentioned, but is not included in the numerical implementation. The analytic framework is heavily inspired by Miltersen&Schwartz(1998); however, while they allow the interest rate to be stochastic th...

This paper studies the effects of terms of trade volatility on growth. First, we present a simple two-sector model where it is costly to initiate tradable goods production and terms of trade volatility decreases the labor force share of the tradables sector and GDP. Second, we show that the authorities can use international liquidity (reserves) to stabilize the real exchange rate, restore the e...

The exchange option was introduced by Margrabe in [1] and its price was explicitly computed therein, albeit with some small variations to the models considered here. After that important introduction of an option to exchange one commodity for another, a lot more work has been devoted to variations of exchange options with attention focusing mainly on pricing but not hedging. In this paper, we d...

It is argued that the vector space measures used to measure closeness of market prices to predictors for market prices are invalid because of the observed metric of commodity space. An alternative representation in Hilbert space within which such measures do apply is proposed. It is shown that commodity exchanges can be modeled by the application of unitary operators to this space. In 1983 Farj...

This essay makes the underlying assumption that scientific information is an economic commodity, and that scientific journals are a medium for its dissemination and exchange. While this exchange system differs from a conventional market in many senses, including the nature of payments, it shares the goal of transferring the commodity (knowledge) from its producers (scientists) to its consumers ...

We study the relation between the stability of a competitive equilibrium (CE) and the price adjustment mechanism used to attain that equilibrium point. Using two specific examples, a three-commodity exchange economy with a unique competitive equilibrium (Scarf's global instability example) and a two-commodity, two-trader type exchange economy with multiple competitive equilibria, we show that t...

The monetary character of trade, use of a common medium of exchange, is shown to be an outcome of economic general equilibrium in the presence of transaction costs and market segmentation (in trading posts with a separate budget constraint at each transaction). Commodity money arises endogenously as the most liquid (lowest transaction cost) asset. Scale economies in transaction cost account for...