When Will the Bubble Burst?

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Date
2015-07-20
Authors
Babcock, Bruce
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Babcock, Bruce
Emeritus Professor
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Center for Agricultural and Rural Development
Abstract

High prices are their own worst enemy. Increased profit margins entice entrepreneurial investment, which results in increased production. Lower market prices inevitably follow. The magic hand of Adam Smith ensures that winners’ gains and losers’ losses will be temporary, as entrepreneurs correct market imbalances.

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