Answer to Question #56789 in Other Economics for George
What are the ‘dynamic links’ that affect freight rates? (maritime economics)
The link between market balance and freight rates is one of the most important economic relationships in the model and it is controlled by shipowners who decide how to respond. Because of this behavioral element mathematical models can never be totally relied upon to simulate the freight market. Demand is volatile, quick to change and unpredictable; supply is ponderous and slow to change; and the freight mechanism amplifies even small in balances at the margin.
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