Does speculation cause high red meat prices? Evidence from Turkey

Abstract

AbstractThe focus of this letter is the upward trend of red meat prices in Turkey that began to surge in 2009. A typical explanation for such price increases would be an inadequate supply of livestock. Yet, although measures were taken to raise the supply of red meat, they were not sufficient to reverse or stop this upward trend in prices. We specifically search for the dynamics behind the price spikes by exploring whether they were driven by speculation. We investigated the presence of rational speculative bubbles in the red meat market in Turkey by employing a recent methodology developed by Phillips et al. (2015). We found evidence for explosive periods and detected the periods of speculative bubbles in the red meat market in Turkey. [EconLit citations: C4, D4, O13].