Abstract
Two theories are advanced to explain the returns of speculators in commodity futures markets. One, the ‘theory of normal backwardation,’ views speculative returns as directly linked to the bearing of risk; the other, which we shall call the ‘forecasting theory,’ considers returns to be determined by the ability of speculators to forecast prices accurately. Although competitive, these theories are not mutually exclusive. This paper presents evidence on the extent to which each of these competing explanations may have been operative in United States commodity futures markets from 1947 to 1965.
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References
Paul Cootner, ‘Returns to Speculators: Telser versus Keynes,’ The Journal of Political Economy, August 1960.
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C. S. Rockwell, Profits, Normal Backwardation and Forecasting in Commodity Futures (unpublished Ph.D. dissertation, University of California, Berkeley, 1964 ).
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© 1976 Palgrave Macmillan, a division of Macmillan Publishers Limited
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Rockwell, C.S. (1976). Normal Backwardation, Forecasting, and the Returns to Commodity Futures Traders. In: The Economics of Futures Trading. Palgrave Macmillan, London. https://doi.org/10.1007/978-1-349-02693-7_10
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DOI: https://doi.org/10.1007/978-1-349-02693-7_10
Publisher Name: Palgrave Macmillan, London
Print ISBN: 978-1-349-02695-1
Online ISBN: 978-1-349-02693-7
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