Financialization and Structural Change in Commodity Futures Markets

Scott Irwin and Dwight R. Sanders

Journal of Agricultural and Applied Economics, 2012, vol. 44, issue 3, 26

Abstract: The first decade of the 21st century has perhaps witnessed more structural change in commodity futures markets than all previous decades combined. Not only have trading volumes and open interest increased markedly, but this time period also saw historic changes in both trading and participants. The available literature indicates that the irrational and harmful impacts of the structural changes in commodity futures markets over the last decade have been minimal. In particular, there is little evidence that passive index investment caused a massive bubble in commodity futures prices. There is intriguing evidence of several other rational and beneficial impacts of the structural changes over the last decade. In particular, the expanding market participation may have decreased risk premiums, and hence, the cost of hedging, reduced price volatility, and better integrated commodity markets with financial markets.

Keywords: Marketing (search for similar items in EconPapers)
Date: 2012
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (95)

Downloads: (external link)
https://ageconsearch.umn.edu/record/130280/files/jaae443ip8.pdf (application/pdf)

Related works:
Journal Article: Financialization and Structural Change in Commodity Futures Markets (2012)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ags:joaaec:130280

DOI: 10.22004/ag.econ.130280

Access Statistics for this article

More articles in Journal of Agricultural and Applied Economics from Southern Agricultural Economics Association Contact information at EDIRC.
Bibliographic data for series maintained by AgEcon Search ().