Principles of Economics: Microeconomics - Speculation

Speculation is often considered to be morally dubious. But, can speculation actually be useful to the market process? This video shows that speculation can actually smooth prices over time and increase welfare. Speculators take resources from where they have low value and move them through time to where they have high value. We also take a look at speculation in the futures market — for instance, can orange juice future prices help predict Florida weather? Let’s find out. Microeconomics Course: https://mru.io/26h Next video: https://mru.io/9xg Help us caption & translate this video! http://amara.org/v/GGJ4/ 00:00 Introduction 00:42 Speculation 02:07 Speculation tends to smoothen prices 04:00 Speculation increases welfare 05:30 Futures market 07:57 The use of information in markets 08:56 Conclusion