AN ECONOMETRIC EVALUATION OF STABILIZATION POLICIES FOR THE U.S. GRAIN MARKET

This paper evaluates stabilization policies by applying methods of stochastic control and dynamic analysis to an econometric model of the U.S. grain market. Its main results are: (1) the aggregate consumer and producer surplus generated by the model is insensitive to the choice of the market regime; (2) policies directed to stabilize prices at levels compatible with nondecreasing farm revenue require the management of both grain inventories and domestic supply; (3) price fluctuations are significantly less under optimal stabilization than in the unregulated version of the model; and (4) historical policies have destabilizing effects on the market model.Crop Production/Industries,

AN ECONOMETRIC EVALUATION OF STABILIZATION POLICIES FOR THE U.S. GRAIN MARKET

This paper evaluates stabilization policies by applying methods of stochastic control and dynamic analysis to an econometric model of the U.S. grain market. Its main results are: (1) the aggregate consumer and producer surplus generated by the model is insensitive to the choice of the market regime; (2) policies directed to stabilize prices at levels compatible with nondecreasing farm revenue require the management of both grain inventories and domestic supply; (3) price fluctuations are significantly less under optimal stabilization than in the unregulated version of the model; and (4) historical policies have destabilizing effects on the market model

PERCS, DECS, AND OTHER MANDATORY CONVERTIBLES

From their beginnings in 1988, mandatory convertibles such as PERCS and DECS have grown to account for as much as 25% of a convertible market that experienced new issuance of $20 billion in 1996. Mandatory convertibles usually pay a higher dividend than the company's common stock (generally for a three-year period) and then require the holders to convert into common stock under terms that provide limited appreciation until conversion. 1997 Morgan Stanley.

Income Insurance with Uncertain Output.

This paper examines the properties of a market solution to the output uncertainty problem faced by unincorporated primary producers. An insurance contract is formulated and shown to provide income insurance to producers without exposing insurers to moral hazard. The equilibrium relative to this contract is shown to be equivalent to that effected by a stock market available to all producers. Copyright 1989 by Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association.