The Timber Bubble that Burst Government Policy and the Bailout of 1984 [Hardcover]

This is a book about bubble prices, and their consequences, in the timber industry of the Pacific Northwest from 1979-1984. Bubble prices--unusual and rapid rises (and eventual drops) in the prices of a commodity--have been of theoretical interest to economists for many years. This study examines the unusual movements in the price of federal timber and the subsequent recession in the Northwest when timber buyers delayed harvests in order to postpone the realization of their losses on the contracts. Mattey argues that it was not so much the actions of the Federal Reserve, which had been widely blamed for the crisis, but rather the actions of the buyers themselves that caused the recession.

Should have wide appeal....Reveals how political interest groups can influence the rules under which government agencies operate and why seemingly simple actions, such as the selling of public timer, can result in fiasco. --Journal of Regional Science

A serious piece of scholarship that combines the author's own insights and recently theoretical insights of others, along with a wealth of real-world detail, to explain the behavior of the market for timber futures in the Northwest from 1979-82. The results should be of interest to analysts and policymakers in forestry as well as macroeconomics and industrial organization. --John L. Solow,University of Iowa

The book should be of interest to forest products economists, environmental economists, and futures market economists who are interested in the effect of market institutions on prices. --Journal of Economic Literature

Mattey has chosen an important question for public timber policy. He frames his hypotheses carefully and tests them rigorously....His contribution is important. --Forest Science