[Note: "Bimetallism" argued that currency should be convertible/backed by gold or silver. "Symmetalism" argued that currency be convertible to a basket of metals, i.e. a mix of gold and silver in fixed proportion to each other. Analytical forerunner of commodity basket-backed currency.]

[on p.339 discusses the determinacy of prices when there is "bimatellism with a fixed quantity ratio".]

[Apparently refers to a commodity-basket-backed currency]

[Original "symetallism" proposition, i.e. bimetallism "with a fixed quantity ratio" where instead of convertibility into either gold or silver, conversion is into a bundle of gold and silver.

["Symetallism" continued]

[Early call for commodity reserves for price stability]

[First exposition of the proposal]

[the book]

[Enthusiastic review of Graham]

[Identifies Graham's proposal as the only possible way of fully consumating the twin roles of money as unit of account and "bearer of options".]

[Sustained attack on gold standard.]

[Propose "International Commodity Control" agency responsible for financing and creating of buffer stocks in most raw materials.]

[The major critique of the proposals of Benjamin Graham and Frank D. Graham]

[Reply to Beale, Kennedy and Winn]

[Reply to Beale, Kennedy and Winn]

[Rejoinder to B.Graham and F.Graham]

[Discusses and advocates adoption of international commodity reserve currency standard - stressing the "international" aspect in particular.]

[Critique of Hayek]

[Commends Graham's scheme, but argues that it needs to be placed in a wider fiscal-monetary context.]

[Frank Graham changes his proposals slightly. Suggests establishment of "Federal Reserve Corporation" (a Fed for commodities) using private sector as agents. See Lerner's interesting comments and Lerner's own paper (similar mechanism for different purpose).]

[Benjamin Graham sets his commodity reserve currency proposition in historical context]

[Review of the monetary-theoretic implications of a commodity reserve currency concept]

[Post-Bretton Woods call for the necessity of commodity reserve currency to supplement the IMF]

[Argues that Graham's plan has political difficulties. Better for England than US.]

[Critique of Graham?]

[Kaldor's main paper on commodity reserve currency - i.e. "bancor". Have (1) IMF issue bancor convertible to gold and bundle of commodities (30 goods); (2) bancor fully covered by commodities and gold with only a small fixed percentage being fiduciary issue; (3) only Central Banks can hold bancor balances with the IMF; (4) recommended initial issue of $30bn, of which $5bn by gold, $20bn by commodities and $5bn fiduciary. There is a single buffer stock for a bundle of commodities in fixed proportions. Argued that benefit is that it stops falling primary commodities prices from depressing industrial demand and thus reducing demand for manufactured goods and fall in scale of world investment in primary sector.]

[Critique of Kaldor at al. - arguing that cost of buffer stock scheme would be 6% of the value of stock per year (against Kaldor's initial estimate of 3-3.5% per year)]

[Defense of Kaldor et al. against Grubel.]

[Independent version of Kaldor's scheme by French translator of Keynes's General Theory and top official of the IMF]

[Argues that a basket of securities is what backs currency]

[Discusses the advantages of "bancor" - specifically comparing the differential effects of oil crisis and harvest failures on rich and poor countries respectively.]

[Mathematical treatment of CRC and derivation of "pricing rules" of commodity bundle to get price stability. More flexible version of early CRC literature.]

[Reiterate call for Bancor. Discusses costs of price instability and slow adjustment to long run equilibrium. Thus, it is important to anchor prices into "normal prices" (via bancor) and thus make for more general and faster stability.]

[Argues for a commodity-backing of currency]

[Calling again for bancor scheme, although now called for individual buffer stocks for various commodities (to distinguish and counter independent movements in commodity prices like the oil shock). Also discusses the productivity-enhancing role of the price stabilization enabled by such a scheme. Also discusses the stagflationary effects of primary product price changes.]

[Critique of Greenfield and Yeager. Supports Free Banking, but argues against commodity-reserve. Similar to Friedman's 1951 argument]

[Review of the commodity-reserve currency in a Free Banking system in light of the "legal restrictions" theory of money.]

[This paper considers schemes using floor prices or deficiency payments for market stabilization. Many results can be derived analytically for the conventional comparative statics approach. But the incidence of the scheme is a dynamic problem which requires numerical solution. The incidence on producers consists of a one-time wealth change, the sign and strength of which depends on the curvature of consumption demand, the source of the market disturbance, the level of support and the elasticity of supply. Commodity destruction can dominate a buffer stock, and deficiency payments are most attractive when the source of disturbance is exogenous to the domestic market.]

[Commodity stabilization under a buffer stock and under a buffer fund are compared. In the case where a good cannot be physically stored, stability brought about by a buffer fund scheme cannot result in a net welfare improvement for society. When instability is due only to demand variability, there are no gainers or losers; when instability is due to supply variability, a buffer fund does not result in a welfare loss to society, but there is a transfer of income from taxpayers to producers. Hence, producer arguments for a buffer fund are a desire for a redistribution of income in their favor.]

[Food price instability has important effects on consumers, which have been largely ignored in the literature on commodity price instability. This paper discusses these differences, and argues that distribution issues are central and that futures markets are not well designed to provide consumer insurance. The competitive market will undertake too little price stabilization, but a universal ration entitlement, which would act as a substitute for futures markets, would provide more cost-effective insurance. If the coverage of ration entitlements is incomplete, however, providing increased price stabilization by additional buffer stocks may be more cost effective than rations.]

[A first attempt at a systematic analysis of a multilateral guarantee scheme is combined with a treatment, similar in scope and homogeneous in exposition, of a buffer stock scheme. The income transfer and income stability consequences of both schemes are derived and compared.]

[The paper extends the traditional Waugh-Oi-Massell literature of commodity price stabilization to rational expectations model that includes (a) partially flexible production; (b) competitive private storage; and (c) the authorities' costs of buffer-stock operations. Price stabilization improves each group's welfare with respect to its own disturbances, and reduces welfare with respect to disturbances impinging on other groups' demand or supply. The private sector as a whole gains unambiguously from price stability, while the stabilization authorities always lose. Price stabilization might make the overall society (i.e., the private and official sectors) better off for a while, but should eventually generate a social potential-welfare loss.]

[Economic evaluations of policies of public intervention in private market exchange often proceed from a presumption that the allocation of resources provided by private markets is approximately competitive and so Pareto efficient. Public interference in such markets can be justified only if a significant "market failure" occurs. Observations of substantial volatility in the prices of primary commodities over time has often been cited as evidence that exchange in markets for such commodities is not Pareto efficient and that public redistributive policies can be designed so as to promote the stability of income to participants in these markets and improve their welfare. Both the efficiency of such policies and their welfare implications have been studied under a variety of assumptions regarding the preferences and technologies of market participants, the nature of stochastic disturbances to market equilibria, the role of information available to market participants, and the partial or general nature of the equilibrium in the model under study. A pervasive source of market failure in the exchange of most primary commodities is the absence of a complete set of markets for risk. When market participants engage in activities characterized by uncertainty, the optimality of market equilibria cannot be supported when the risk borne by each participant cannot be reallocated through private exchange. The existence and nature of public policies promoting income stability to market participants when risk cannot be reallocated through private exchange are the concern of this paper. Three types of policies are studied. First, a market in one-period futures contracts is established to allow market participants to stabilize their income by privately reallocating their risk. Second, a policy of direct intervention in the commodity market through operation of a commodity buffer stock is studied, when agents have no opportunity to engage in futures exchange. Third, a policy of indirect intervention in the commodity market through public speculation in the futures market is studied. The market environment within which such policies are studied is characterized by the following qualities: (1) equilibrium is restricted to a single market, (2) the commodity exchanged is durable, (3) three classes of competitive agents comprise the market: consumers, producers, and inventory-holding speculators, (4) producers and speculators operate under price uncertainty and exhibit a constant aversion to risk, (5) the activity of each class of agents is a source of stochastic disturbance to market equilibrium, (6) producers and speculators form rational expectations of the relevant moments of the commodity price distribution, and (7) policies of intervention in either the commodity or futures markets are conducted according to linear feedback rules based on the same amount of market information available to producers and speculators.

[There is a close correspondence between buffer stock stabilization of primary commodity prices and hedging strategies using futures or options markets. In particular, bandwidth stabilization, employed in most buffer stock agreements, closely resembles the strategy obtained by purchasing a put option and writing a call option at prices symmetrically below and above the central price. This suggests that the choice between hedging and stabilization should depend less on the properties of hedged and stabilized revenues under ideal conditions than on the implications of departures from these conditions.]

[This paper sets up a model of commodity speculation in the presence of a public buffer stock intervention. Equilibrium is characterized, existence is proven and sufficient conditions for uniqueness are given. These take the form of the buffer stock having "marginal propensities to store" between zero and one. A limited policy neutrality result is proven, but where the buffer stock does have an effect, some strong contrasts with the laissez-faire case are established. For example, the equilibrium is not necessarily a constrained social optimum; a sufficient condition is given under which it is. Further, examples are given in which a putatively stabilizing buffer stock intervention actually creates a price bubble where otherwise none could exist.]

[Stochastic-dynamic programming and disequilibrium maximum likelihood methods are combined to estimate a dynamic nonlinear rational expectations model of a market for a storable primary commodity. The estimation model captures the inherently nonlinear structure of private stockholding dynamics, the disequilibrium effects of government buffer stock intervention, and the impact of price expectations and risk on private supply and stockholding decisions.]

[The paper examines the competition between public authorities and private speculators in a two period seasonal model where speculators decide on the quantity of grain to be stored from the first to the second season. Most government procurement of grain also occur in the first season. The equilibrium no-arbitrage condition suggests that private storage and hence the volume of procurement, is sensitive to market anticipations of public grain sales in the second season. If market expectations are conditioned on the volume of government stock, procurement is subject to speculative attacks. The implications of such speculative activity for market responses to exogenous shocks are examined in a theoretical model. The empirical model tests for the importance of speculative activity in explaining fluctuations in wheat procurement in India during the period 1970-1990. The results suggest that government has used its trade and buffer stocking strategies in a manner that has achieved credibility for its intervention.]

[The price stabilizing impact of private stockholding is compared with the price stabilizing impact of a centrally imposed band-width price policy (buffer stock) on the basis of monthly data of the Indian natural rubber market covering the period 1978-1991. The quantitative analysis reveals that the elasticity of speculative stock demand is three to four times higher without price policy. Simulated prices confirm the stabilizing impact of private stock behavior: the hypothesis that a band-width price policy is more effective in stabilizing prices than private stockholding cannot be confirmed.]

[Scheme of primary product price stabilization by using buffer stocks.]

[The welfare effects of price stabilization are quantified under free trade and under distortionary policies when an exporting country protects domestic producers with price supports, an importing country pursues a price-fixing policy, and a second importing country follows a free-trade policy. Results show that distortionary interventions cause greater world price variability. World gains from international price stabilization through a costless buffer stock scheme are higher under distortionary trade than under free trade.]

[Countries often use a host of policies, such as buffer stocks or variable levies, in order to stabilize their own market or protect themselves against external instability. These policies may transfer domestic price instability to their trading partners. We study a two-country partial equilibrium model in which price variability, triggered by fluctuations in supply, provides the main motive for trade and for the application of approximate trade policies. While both countries are likely to gain from the stabilizing effects of free trade, the country that intervenes to regulate its trade may reap extra gains at the expense of its trading partner. This may lead, however, to an open "trade war" from which all countries may lose.]

[Multiple agreements on commodity price stabilization via buffer stocks as a way to stabilize terms of trade and help development]

[Attacks Kaldor's scheme on the basis that simple fiscal and monetery demand-management policies are cheaper and more efficient that commodity reserve schemes.]

[Commodity stabilisation agreements have often been suggested as a means of stabilising producers' revenues and redistributing productive resources to less developed economies (from "North" to "South"). But no empirical estimates of how much may be expected from such agreements, nor of what they would cost to operate, have appeared. This paper examines, in the context of one market, how far prices can be stabilised by buffer stock interventions, the costs of that stabilisation, and whether any redistribution would be achieved. We find pure stabilisation leads to transfers away from the South, but that supply restrictions which force redistribution are extremely expensive. However it is relatively cheap to protect producers in the South against the uncertainty of future revenues.]

[World prices for agricultural commodities are traditionally unstable, but they were particularly turbulent during the late 1970s and early 1980s. This paper uses available post-War data on individual commodity prices to test whether world price instability is increasing, and to examine its impact on the prices producers receive in developing countries. It is found that the recent turbulences as more a statistical fluke than the beginning of any longer-term increase in market instability. Further, while the variability in world prices has been almost entirely transmitted to developing countries in the dollar value of their export unit values, it has not been fully transmitted to average producer prices. Real exchange rates, domestic marketing arrangement and government intervention have acted to buffer price movements for producers in many developing countries.]

[From Barry Bosworth's review in JEL March 1994:

This book is motivated by a striking collapse of international commodity prices in the 1980s. While the sharp rise of commodity prices in the early 1970s attracted a great deal of attention in the more-developed consuming nations, the extent of the reversal of the situation in the 1980s has gone almost unnoticed. Yet, between 1980 and 1987, the price of nonoil commodities fell by 45 percent relative to the price of manufactured products, and they have remained at this depressed level in subsequent years. The magnitude of the foreign exchange loss due to the change in the commodity terms of trade is estimated by the author at $21 billion for the commodity-dependent developing countries. For comparison purposes, the commodity exports of these 130 countries totaled $78 billion and total exports amounted to $158 billion. The terms of trade loss matched in magnitude the increase in debt service costs, which has attracted far more attention. The phenomena are even more surprising when evaluated against the backdrop of a gradual rise in the commodity terms of trade over the prior two decades.

These developments are used to introduce an extensive discussion of international commodity policy. The book devotes only a small amount of space to the question of why commodity prices fell so sharply, and the discussion is limited largely to a summary of research by others. Instead, the primary focus of this book is on international negotiations on commodity policies as reflected in calls for price-stabilizing agreements based on buffer stocks and export controls. This is a familiar agenda to those who remember the North-South negotiations of the 1970s and the calls for a "New International Economic Order," and the author is obviously a strong proponent. The strength of this book is the extensive review of past international negotiations over commodity policies and the strong political perspective that is introduced. Neoclassical economists, as advocates of open international markets, however, will not be favorably disposed toward the book's basic perspective. It does not attempt to introduce new analysis of why commodity markets behave as they do or why prices have declined so sharply over the past decade. While much of the discussion is oriented around commodity price stabilization, the author's clear objective is to raise the average level of prices received by commodity producers. It is this conflict between stabilization over the cycle and efforts to maintain prices above long-run equilibrium levels that destroyed past international buffer stock programs. Both consumers and producers have an interest in stabilization, but they have opposing interests with respect to the average level of prices. The book contains 15 chapters organized around four central subjects: (1) the current crisis and its impact on developing countries; (2) a historical review of international commodity policy; (3) longer-term issues involving the organization of commodity markets, the influence of technical change, and trade barriers of the developing countries; and (4) the future direction of international commodity policy.

Economists will find the discussion of prior negotiations on commodity policy interesting because of the political perspective that the book brings to the issue. The author is clearly sympathetic to the perspective of developing countries; but he gives inadequate consideration to the economic arguments of opponents to international commodity agreements, who question their feasibility. The review of prior proposals for governmental intervention in commodity markets and other forms of assistance is generally quite favorable. What is lacking, however, is any sense of a budgetary limit for developmental assistance, and a need to make choices. If the total funds for assistance are limited, does it make sense to allocate large portions through commodity programs; and, within the area of commodity markets programs, which proposals are most cost-effective?

The third section of the book on longer-term issues provides an interesting analysis of the influence of technical change on reducing the demand for natural materials. Furthermore, the author clearly demonstrates that industrialized countries have structured their tariffs to penalize efforts of the producing countries to diversify their exports by incorporating higher levels of processing prior to export. Tariffs and the frequency of nontariff barriers are far greater for processed than for primary commodities.

I found the final section on the future of international commodity policy of limited value. Many of the specific proposals, such as reducing tariffs on agricultural products, partial debt relief, and expanded development aiding to the poorest countries, would have widespread support; and others seem quite benign, even if of limited effect. The author, however, provides a highly political, conspiratorial, and, I believe, skewed interpretation of the source of industrial country opposition to negotiations aimed at raising the level of commodity prices.]

[Since the early 1980s the dominant feature of the international commodity markets has been a sharp downtrend in prices, though short-term instability has also remained excessively high for many commodities. International policy should therefore be focused on supply management to raise depressed levels of commodity prices. The problem of short-term commodity price instability is best tackled by a series of international buffer stocks, rather than by hedging on the financial markets, a technique which has serious limitations for exporters in developing countries.]

[Price stabilization is one of the most important objectives of agricultural policy. Different methods of price stabilization (buffer stocks, floor-ceiling prices, buffer funds, export/import taxes and subsidies) can be observed in their purest form in developing countries. The most important lesson from the experiences of developing countries for transforming Eastern-European agricultural systems is that, given an underdeveloped system of agricultural trade and finance, market-building by the state cannot be restricted to creating legal frameworks. The government can regulate efficiently only well-functioning markets.]

[The prices in world cereal markets are highly volatile, with adverse impact on the poor in developing countries, who spend 40-50 per cent of their income on cereals. Following the Uruguay Round of trade liberalization, price instability is likely to persist even though the burden of adjustment to supply fluctuations will be shared widely among all trading nations and domestic markets will be less insulated. As a result of a fall in food supplies caused by a reduction in price support programmes, the world cereal stocks that tended to act as a cushion or buffer to absorb supply fluctuations will fall. Under the circumstances, to deal with the impact of price instability on poor countries, what is needed is international agreement to ensure adequate stocks as well as food aid or financial facility at times of high cereal prices as well as national measures to moderate high price instability without seriously jeopardizing commitment to a liberal regime.]

[The effects of four alternative price stabilization programs for soybeans are compared using a rational expectations model and simulation. For a given government expenditure, subsidized private storage is the most efficient way to stabilize market price. For a given deadweight loss, a program of direct payments is the most efficient stabilizer of the effective farm price; this program does not stabilize market price. All four programs, including a buffer stock program and one involving both direct payments and buffer stocks, tend to destabilize quasi-rent. Programs that involve an initial build-up of stock increase producer benefits and hurt consumers.]

[Concerned with how the capability to store a surplus affects the prices and production of commodities. Focus on the behavior over time of aggregate stockpiles provides insights into such questions as how much a country should store out of its current supply of food considering the uncertainty of future harvests. Related topics covered include whether storage or international trade is a more effective buffer and whether stockpiles are more useful in raw or processed form.]

[Food-security enhancing buffer stocks are usually analyzed as projects, to be compared to other feasible projects, but they are also assets like stocks and bonds and can be compared to other feasible assets, while projects can only be compared to specified alternatives, including of course, the no action alternative. The theory of finance accounts for risk in a very general setting, while projects are typically evaluated for risk on the basis of stochastic simulations. Thus the assets market view of food stocks provides a powerful new tool of food-security analysis. In this paper, we propose a much simpler and theoretically better justified exercise - the evaluation of a buffer stock as a financial asset.]

[Nineteen papers examine commodity and resource policies in agricultural systems. Contributions focus on the problems confronting the joint formulation of commercial agricultural and resource policies; the evolution and coordination of U.S. commodity and resource policies; state regulations for agricultural chemical use; policy failures arising from multiple jurisdictions; the effects of commodity program structure on resource use and the environment; the redistribution of income through commodity and resource policy; sequential coordination of agricultural and resource policy; information issues in the coordination of agricultural and resource policy; joint management of buffer stocks for water and commodities; economy and climate; the effects of the feedgrain and wheat programs on irrigation and groundwater depletion in Nebraska; water policy effects on crop production; tradeoffs between agricultural and chemical policies; the effects of commodity programs on resource use; best management practices versus socially optimal practices; agriculture and fisheries; agricultural policies and health regulation; air pollution and agriculture; and the significance of the interaction of agricultural and resource policy. Contributors are mainly economists. Contributors are mainly economists. Just and Bockstael are at the University of Maryland. Author and subject indexes.]

[Seven papers identify and explore a range of views on the possibilities for international stocks management, and determine what might be compatible with the free market. Papers focus on international stocks management in unregulated markets; cereal stocks and production variability in a liberalized world trade environment; implications of grain trade liberalization for LDC food security; Australia's experience with its wool buffer stock scheme; Canadian experience with and reliance on income security and stabilization measures; stabilizing imported food prices for small developing countries; and government grain storage. Contributors are mainly economists. Reinsel is Senior Economist with the Agriculture and Trade Analysis Division of the Economic Research Service, United States Department of Agriculture. No index.]

[The UNCTAD proposal for a Common Fund to finance a series of international buffer stocks for major traded commodities had as one of the assumptions that the prices of different commodities did not always rise and fall at the same time. The present study tests this assumption, using recently developed co-integration techniques for eight of the ten "core" commodities specified in the UNCTAD Integrated Programme for Commodities. While it was found that the majority of pairs of prices of those commodities do move together in the long run, the analysis shows that in the short run (especially in the case of monthly and quarterly movements) the UNCTAD assumption was strongly supported. Thus, if the "First Window" of the Common Fund became operative, it could indeed economize on the use of financial resources by borrowing from some commodity agreements and lending to others.]

[In much of the stabilization literature, emphasis has been placed on the impact of stabilization schemes on producers. However, such schemes may also have significant implications for processors and consumers. In this paper, the Newbery and Stiglitz (1981) approach is extended to demonstrate the effects of both demand and supply instability using the Australian buffer-stock scheme for wool as a case study. It is shown that both producers and processors are likely to gain from price stabilization.]

[A quarterly model of the market for natural rubber and long-term vintage models of supply of natural rubber and demand for all rubber are used to assess the viability of the bufferstocking arrangement under the International Natural Rubber Agreement. Its effect has been to increase producers' revenues by up to 20 percent in some quarters; but now that all the buffer stock has been sold, consumers have benefited more. The agreement cannot counter the impact of overall commodity price changes. Various scenarios for the rest of the century imply a slight fall in natural rubber prices.]

[Estimates the total demand for governmental storage of wheat in Pakistan by separately analyzing interannual supply requirements, seasonal supply requirements, and import buffer requirements. Briefly describes Pakistan's wheat economy, the prospects for future growth of supply and demand, and the historical instability of wheat production in Pakistan. Provides insights into the nature of efficient storage, trade, and price policies; measures the tradeoffs between interannual price variability and fiscal cost, and between the seasonal price spread and fiscal cost; and estimates the minimum amount of stock that should trigger imports month by month. Combines the three components of the demand for storage to calculate total demand. Discusses the policy implications of the analysis and the implications for other countries. Pinckney is Assistant Professor of Economics at Williams College. Bibliography; no index.]

[Simulations of a global coffee model incorporating a vintage capital approach to production are run. Over the recent period of operation of the International Coffee Agreement's export quota system, the authors find that the quota system had a stabilizing effect on world coffee prices. The quotas reduced real export revenues for most small exporting countries, but large producers gained. Most small countries gained, however, in terms of risk reduction. If a brief suspension of the quota occurs from time to time, caused, for example, by adverse weather which results in a shortfall in world supply, the quota system works like a buffer stock scheme; on average, producing countries as a whole lose transfer benefits but gain risk benefits.]

[Food security in macroeconomic terms is largely a matter of portfolio balance. A key variable is the supply of foreign exchange net of needed food imports; lack of effective international financial arrangements or cheap buffer stocks, a high mean and low variance for this variable will help in providing a decent and reliable food supply, and these depend on the "portfolio" of crops grown. This paper presents empirical techniques for studying the effects of "portfolio" choices and the "portfolio" effects of policy changes. The techniques are applied to Ghana and Tanzania, with results which show little benefit from export diversification and little desirability for self-sufficiency.]

[Canada's Western Grain Stabilization Program is analyzed to determine the extent to which it acts as a buffer between the Canadian grains economy and the international grains economy. A dynamic stochastic simulation model is constructed to examine how Canada's Western Grain Stabilization Program modifies the transmission of: (1) domestic yield variability to the foreign grain market and (2) foreign demand variability to the domestic grains market. With respect to (1), the program was found to aggravate international uncertainty only very slightly while with respect to (2) it was found to substantially reduce domestic uncertainty.]

[In this paper a preliminary analysis is presented of a combined buffer-fund and buffer-stock as an alternative to a pure buffer-fund or to the Reserve Price Scheme (buffer-stock). The alternatives analyzed are designed so that each provides the same prices to producers as did the Reserve Price Scheme over the period of analysis. Least-cost combinations of policy instruments are derived. The results show that there is considerable potential for cost savings to be made by combining buffer-fund and buffer-stock instruments.]

[A succession of six international tin agreements operated from 1956 to 1985. Futures trading in tin continued in London until the buffer stock scheme, without cash or the support of its sponsoring governments, collapsed in October 1985. The implications of the tin experience for futures trading and for so-called commodity stabilization schemes are examined.]

[In stabilizing effects of weather uncertainties and recently introduced structural reforms on Indian agriculture and buffer stocks have been examined in this paper. The study is based on an empirical exploration in terms of an integrated parametric programming and dynamic input-output model. It analyzes absolute values of the optimal results, their deviation ratios and coefficients of variation. It reveals all pervasive effects of uncertain weather. When structural reforms are specially introduced in the model, instability in the agricultural sectors, buffer stocks and the overall economy shows mixed results. Coauthors are A. A. Banouei, C. V. Achuthan, and R. G. Parkar.]

[Adverse weather factors in India augment the instability in wheat supply and trade. Consequently, India's wheat trade is a classic example of stochastic supply being the dominant factor in determining trade flows. This study analyzes the effects of random fluctuations in India's wheat supply on domestic and world price variability and trade flows of India and major exporters and importers by using stochastic simulation analysis. Trade mitigates price variability and, thus, acts as a buffer stock program in reducing price variability. The results show that production shortfalls (surpluses) in India benefit wheat exporters (importers) and hurt importers (exporters).]

[John Maynard Keynes's 1938 paper on buffer stocks has long been recognized as a trailblazing work. This paper was part of a longstanding concern with the subject. Keynes's 1923 paper is the earliest cited in D. Newbery and J. Stiglitz (1981). A memorandum written by Keynes during the Second World War (published in 1974) displays analytical insights that anticipate later stabilization theory. Publication of Keynes's Collected Writings makes available his work on commodity markets from India Office and Treasury memos and previously scattered publications. This paper establishes Keynes's pioneering role in the fields of commodity price stabilization and optimal storage, examining the nature of his contributions in these areas.]

[After Kahn's death an unpublished manuscript and other writings on the subject of buffer stocks were found among his papers. For Kahn, the crucial issue was that commodity price instability affected seriously (and unnecessarily) not only producers but also consumers and the world economy in general. He argued that buffer stocks were necessary and that their main function should be to compensate for fluctuations in demand and supply of primary commodities. From this point of view, they would only be able to make marginal contributions to the problems of the chronically low income of many primary producers, and of the possible one-and-for-all change in the relation of demand and supply. [development, primary commodities, international coordination, export-led growth]