Quotulatiousness

June 17, 2015

Speculation

Filed under: Economics — Tags: , , , , , — Nicholas @ 04:00

Published on 8 Feb 2015

Speculation is often considered to be morally dubious. But, can speculation actually be useful to the market process? This video shows that speculation can actually smooth prices over time and increase welfare.

Speculators take resources from where they have low value and move them through time to where they have high value. We also take a look at speculation in the futures market — for instance, can orange juice future prices help predict Florida weather? Let’s find out.

Related posts:

  1. How “those evil speculators” actually provide a very useful public service
  2. Identifying the potential profits from asteroid mining
  3. Oxfam’s latest report a Curate’s Egg
  4. Why the headline inflation rate may not force the Bank of Canada to increase interest rates
  5. What value do speculators offer?

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