NEW CONCEPTS CONCERNING FUTURES MARKETS AND PRICES.

Research on futures markets during the last 40 years has produced results that have required drastic revision or replacement of a great part of the previously accepted theory of futures markets and of the behavior, not only of futures prices, but of the general class of prices that may be called anticipatory. New light has been thrown on the behavior of businessmen, including speculators and on the functioning of the price system. To say that new theory has been required poorly expresses consequences of the research, because main results have not been theory in the usual economic sense of that term. The chief result of the research to be considered here has been the emergence of a series of new concepts arising from observation and statistical analysis. Empirical research has played a leading role in the advancement of economic knowledge and understanding that is described here, but the role has been a different one than economists have ordinarily thought that such research would play in advancing their science, if economics be a science. The practical question of economic usefulness of futures markets is only incidentally referred to in the present paper, in as much as the concern here is to trace the advance of economic understanding rather than to discuss practical uses of such understanding.