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The Relationship Between Price Stabilization and Cycles in the Canadian Wheat Market

Published online by Cambridge University Press:  15 September 2016

J. Stephen Clark  and
K.K. Klein
J. Stephen Clark
Affiliation:
Department of Economics and Business Management, Nova Scotia Agricultural College
K.K. Klein
Affiliation:
Department of Economics, The University of Lethbridge
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Abstract

In this study, moving average price stabilization schemes were analyzed under the assumption of rational expectations. It was shown that moving average price schemes may induce cyclical behaviour into market prices where no cyclical pattern previously existed. Moving average price stabilization schemes are important to Canadian agricultural policy analysis because they are a characteristic of stabilization programs in Canada. Indeed, the Agricultural Stabilization Act, introduced in 1975, and the Gross Revenue Insurance Program, introduced in 1991, use moving average prices to calculate returns to producers.

Type
Articles
Information
Agricultural and Resource Economics Review , Volume 23 , Issue 1 , April 1994 , pp. 22 - 28
Copyright
Copyright © 1994 Northeastern Agricultural and Resource Economics Association 

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