Who Destabilizes Primary Product Prices?

Abstract

The concern of this paper is with the allocation of blame for price fluctuations. To many people, the real villain is revenue fluctuations, and these latter are a compound of price and quantity fluctuations. Blame for revenue fluctuations falls quite heavily upon demand--almost inevitably--since demand fluctuations move price and quantity in the same direction while supply fluctuations cause partially offsetting movements of price and quantity. In summary, it is important to keep in mind throughout the paper what is being implicitly included in these residual demand-shift and supply-shift elements.