S-Space College of Social Sciences (사회과학대학) Institute of Economics Research (경제연구소) Seoul Journal of Economics (SJE) Seoul Journal of Economics vol.06(3) (Fall 1993)
A Generalization of Modeling for Markets of Substitutive Raw Materials
- Issue Date
- Seoul Journal of Economics, Vol.6 No.3, pp. 267-282
- In this paper we generalize a commodity market model to n gross substitutes. We analyse the specification errors if some gross substitutes are neglected. We proved the following main proposition that the volatility of market price and trade volume for each of the n gross substitutes will be underspecified in a model in which at least one of the gross substitutes is not considered, and the degree of the specification error for the price volatility and the trade volume is more serious the higher the number of gross substitutes not considered in a model.