Financialization of Commodity Markets

Ing-Haw Cheng and Wei Xiong ()
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Wei Xiong: Department of Economics and

Annual Review of Financial Economics, 2014, vol. 6, issue 1, 419-441

Abstract: The large inflow of investment capital to commodity futures markets in the past decade has generated a heated debate about whether financialization distorts commodity prices. Rather than focusing on the opposing views concerning whether investment flows caused a price bubble, we critically review academic studies through the perspective of how financial investors affect risk sharing and information discovery in commodity markets. We argue that financialization has substantially changed commodity markets through these mechanisms.

Keywords: financialization; speculation; hedging; risk sharing; information discovery (search for similar items in EconPapers)
JEL-codes: G1 (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (306)

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Related works:
Working Paper: The Financialization of Commodity Markets (2013)
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