Essays on Commodity Markets
This essay is composed of two papers. In the first paper, I build a theoretical model for the double-sided squeeze in the commodity futures market. The model shows that the manipulator can profit from combining standard short squeeze techniques with control of the physical flows in the warehouses. In the second paper, I build a model for commodity middlemen with aggregate demand shocks. The model shows that having more middlemen in the market can increase the spot price volatility and decrease producers' surplus, all contrary to common wisdom.
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