Abstract
The motivation for this Chapter stems from two observations. Firstly, the majority of the theoretical and empirical literature on the effect of volatile commodity prices on developing countries does not separate the notion of the instability of those prices from the notion of uncertainty attached to the prices of primary goods1. Secondly, although there has been a certain amount of work on the role of futures markets to reduce uncertainty or instability there has been little work on the use of option contracts in this fashion2.
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Powell, A. (1991). Options to Alleviate the Costs of Uncertainty and Instability: A Case Study of Zambia. In: Phlips, L. (eds) Commodity, Futures and Financial Markets. Advanced Studies in Theoretical and Applied Econometrics, vol 21. Springer, Dordrecht. https://doi.org/10.1007/978-94-011-3354-8_3
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DOI: https://doi.org/10.1007/978-94-011-3354-8_3
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