Isabel Figuerola-Ferretti , Queen Mary, University of London Christopher L. Gilbert , Vrije Universiteit Amsterdam
February 1, 2001
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We examine the impact of the pricing regime on price variability with reference to the non-ferrous metals industry. Theoretical arguments are ambiguous, but in any case suggests that the extent of monopoly power is more important than the pricing regime as determinant of variability. Slade (1991) argued that metals price volatility increased in the nineteen eighties relative to the seventies, and that this was associated with a move from administered producer pricing to exchange pricing. This claims are only partially supported. Extension of Slade's sample to the present indicates that any early differences between the variability of producer and exchange prices have now vanished.
J.E.L classification codes: G1, L61
Keywords:Metals, Futures trading, Exchange pricing, Producer pricing, Price volatility