Recent Surge in Global Commodity Prices-- Impact of financialization of commodities and globally accommodative monetary conditions --

Yasunari Inamura, Tomonori Kimata, Takeshi Kimura and Takashi Muto
Additional contact information
Yasunari Inamura: Bank of Japan
Tomonori Kimata: Bank of Japan
Takashi Muto: Bank of Japan

No 11-E-2, Bank of Japan Review Series from Bank of Japan

Abstract: Global commodity prices have been rising again since 2009, and particularly rapidly since the fall of 2010. While the strong increase in commodity prices has been driven by global economic growth propelled by emerging economies, speculative investment flows into commodity markets have amplified the intensity of the price surge. The dynamics of global commodity prices has been changing as well, in accordance with the growing presence of financial investors in commodity markets. The entry of new financial investors has paved the way for the "financialization of commodities". Consequently, global commodity markets have become more sensitive to portfolio rebalancing by financial investors, which has made commodity markets more correlated with other asset markets, including major equity markets. Furthermore, globally accommodative monetary conditions have played an important role in the surge in commodity prices, both by stimulating physical demand for commodities and driving more investment flows into financialized commodity markets.

Date: 2011-03
References: Add references at CitEc
Citations: View citations in EconPapers (14)

Downloads: (external link)
http://www.boj.or.jp/en/research/wps_rev/rev_2011/data/rev11e02.pdf (application/pdf)

Related works:
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:boj:bojrev:11-e-2

Access Statistics for this paper

More papers in Bank of Japan Review Series from Bank of Japan Contact information at EDIRC.
Bibliographic data for series maintained by Bank of Japan ().