Agric. Econ. - Czech, 2019, 65(2):67-73 | DOI: 10.17221/151/2018-AGRICECON

Do natural rubber price bubbles occur?Original Paper

Chi-Wei Su1, Lu Liu*,2, Ran Tao3, Oana-Ramona Lobonŝ4
1 School of Economics, Qingdao University, Qingdao, China
2 Department of Finance, Ocean University of China, Qingdao, China
3 Technological Center, Qingdao Municipal Center for Disease Control & Preventation, Qingdao, China
4 Department of Finance, West University of Timisoara, Timisoara, Romania

In this paper, we employ the Generalized Supremum Augmented Dickey-Fuller test in order to identify the existence of multiple bubbles in natural rubber. This approach is practical for the using of time series and identifies the beginning and end points of multiple bubbles. The results reveal that there are five bubbles, where exist the divergences between natural rubber prices and their basic values on account of market fundamentals. The five bubbles are related to imbalance between supply and demand, inefficiencies of smallholders market, oil prices, exchange rate and climatic changes through analyses. Thus, the corresponding authorities are supposed to identify bubbles and consider their evolutions, which is beneficial to the stability of natural rubber price.

Keywords: bubbles; Generalized Supremum Augmented Dickey-Fuller test (GSADF); natural rubber price

Published: February 28, 2019  Show citation

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Su C, Liu L, Tao R, Lobonŝ O. Do natural rubber price bubbles occur? Agric. Econ. - Czech. 2019;65(2):67-73. doi: 10.17221/151/2018-AGRICECON.
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