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Financialization of Commodity Markets
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Financialization of Commodity Markets
Financialization of Commodity Markets
Journal Article

Financialization of Commodity Markets

2014
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Overview
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.