Economic theory states that the spatial equilibrium condition is a region where prices can be or not cointegrated. It is when prices are within such a region when they are no cointegrated, when prices are in its boundaries they are not only cointegrated but also fulfilling the Law of One Price...

This paper proposes and evaluates area index-based financial contracts for specific farm activities. These financial contracts allow not only for removing moral hazard and adverse selection as index insurances do, but also for adding more flexibility and, hence, better risk protection. The...