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RATIONAL EXPECTATIONS IN THE AUSTRALIAN WOOL INDUSTRY
Author(s) -
Fisher Brian S.
Publication year - 1983
Publication title -
australian journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.683
H-Index - 49
eISSN - 1467-8489
pISSN - 0004-9395
DOI - 10.1111/j.1467-8489.1983.tb00426.x
Subject(s) - rational expectations , wool , economics , welfare , econometric model , econometric analysis , process (computing) , microeconomics , econometrics , financial economics , market economy , computer science , geography , archaeology , operating system
The process by which producers form expectations has implications for model building and policy analysis. An econometric model of the Australian wool market is estimated. It is shown that the rational expectations hypothesis is not inconsistent with the data for both the period before the floor price scheme was implemented and since that date. This finding has important implications, since it has been shown that the welfare gains from stabilisation are small if producers form rational expectations.