Commodity models for forecasting and policy ananlysis.

Commodities are a crucially important element in the modern world economy. The purpose of this book is to present the basics of commodity modeling, forecasting and policy analysis to a wide audience. Each of the major modeling methods is explained in detail but excessive mathematical notation is avoided.

The book begins with a description of the basic characteristics of commodity markets and how these characteristics give rise to needs for modeling. It reviews the historical evolution of commodity modeling and then explains basic methodologies in detail: econometric market, process and demand models; spatial equilibrium and programming models; optimization models; system dynamics and system models; and other modeling approaches. The authors then discuss the needs for and methods of model validation: forecasting and policy analysis are presented as the basic applications of commodity models. Particular attention is also given to policy applications in commodity market stabilization. Prescriptions for future modeling efforts and a complete commodity models bibliography complete the study.

These topics should thus stimulate economists and engineers interested in modeling at a greater in-depth level. Model users and planners should be better able to understand how model applications can be used to their benefit and commodity forecasters, whether dealing in physical or futures markets should become aware of the potentials for improving forecasts in this area.