The value of the timing option implicit in CBOT corn futures contract is estimated. Separate estimates are obtained for the option without and with convenience yield. The effect of the option on basis behavior at day one of the maturity month is examined and is found statistically significant.

An updated supply of storage equation is estimated to reflect recent developments in the theoretical and empirical literature. Among the findings is an inverse relationship between storage cost adjusted price spread and a proxy measure of convenience yield, and a curvilinear relationship between...

The expected net return to storage is conventionally calculated as the expected change in price over the storage period minus the cost of storage. However, this value is almost always negative, thus raising the question why would anyone store. Numerous explanations have been proposed, but none...

Oil-producing countries have benefited from rising oil prices in recent years. The increase in oil exports and oil revenues has had major implications for these countries. These developments have revealed how governments manage their fiscal policies in light of changing oil-market conditions and...

This paper examines the environmental effects of mineral taxes in a framework that recognizes the importance of rates and cumulative externalities and proposes an appropriate corrective tax. It concludes that mineral resources taxation should combine neutral taxes with a dynamic Pigovian type...

This Selected Issues paper on Algeria reports that the authorities have relied on an expansionary fiscal stance to stimulate growth and employment, but structural reforms have virtually stalled. Although the economy has recorded increasing growth, the nonhydrocarbon sector remains small and...

Optimal recycling of minerals can be thought of as an integral part of the theory of the mine. In this paper, we consider the role that wastewater recycling plays in the optimal extraction of groundwater, a renewable resource. We develop a two-sector dynamic optimization model to solve for the...

This paper analyzes Solomon Islands’ ongoing reforms concerning of the mineral taxation regime and the fiscal impact of mineral resources. The analysis shows that mineral revenue could be substantial, provided that mineral prices remain strong in the medium term. Enforcing the tax...

This paper suggests that it is essential to save a substantial portion of mineral revenues now to ensure fiscal sustainability for a post-diamond period. Taking the non-mineral primary balance into account can help clarify desirable fiscal policies. Botswana’s real effective exchange rate...

Economic theories of managing renewable resources, such as fisheries and forestry, traditionally assume that individual harvesters are perfectly rational and thus able to compute the harvesting strategy that maximizes their discounted profits. The current paper presents an alternative approach...