Buffer stocks operation with different supply specification: A simulation analysis

The paper examines, via simulation analysis the stabilizing effects of buffer stocks under different forms of supply functions, where each specification of the supply function represents a different expectational form about future prices. The analysis is carried out under different assumptions of the market structure allowing, in particular, for the effects of serial correlation. The paper concludes that the specific effects of buffer stocks strongly depends on the economic environment wuthin which they operate.