In this paper we derive optimal stockpiling policies for an economy that faces an embargo threat with respect to essential resources. The properties of the optimal program depend crucially on the access of this country to a perfect capital market and on the factor allocation in embargo periods....

A contingent claims valuation model which allows to highlight the implications of program trading in spot markets for the pricing of European-style foreign currency options and for the volatility strike structure implicit in these contracts is devoloped. The curvature of the volatility strike...