The Supply of Storage

  • Michael J. Brennan


It is a familiar proposition that the amount of a commodity held in storage is determined by the equality of the marginal cost of storage and the temporal price spread. Why then do we observe stocks being carried from one period to the next when the price expected to prevail in the next period — reflected in the futures price quotation for delivery in that period — is below the current price.


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  1. 1.
    N. Kaldor, ‘Speculation and Economic Stability,’ Review of Economic Studies, vol. VII, 1939, pp. 1–27. H. Working, ‘The Theory of the Inverse Carrying Charge in Futures Markets,’ Journal of Farm Economics, vol. XXX, pp. 1–28.CrossRefGoogle Scholar

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© Palgrave Macmillan, a division of Macmillan Publishers Limited 1976

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  • Michael J. Brennan

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