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Global Commodity Markets - Price Volatility and Financialisation

Author

Listed:
  • Alexandra Dwyer

    (Reserve Bank of Australia)

  • George Gardner

    (Reserve Bank of Australia)

  • Thomas Williams

    (Reserve Bank of Australia)

Abstract

A significant increase in the level and volatility of many commodity prices over the past decade has led to a debate about what has driven these developments. A particular focus has been on the extent to which they have been driven by increased financial investment in commodity derivatives markets. This article examines the factors behind the increase in the level and volatility of commodity prices. The available evidence suggests that while financial investors can affect the short-run price dynamics for some commodities, the level and volatility of commodity prices appear to be primarily determined by fundamental factors.

Suggested Citation

  • Alexandra Dwyer & George Gardner & Thomas Williams, 2011. "Global Commodity Markets - Price Volatility and Financialisation," RBA Bulletin (Print copy discontinued), Reserve Bank of Australia, pages 49-58, June.
    • Handle: RePEc:rba:rbabul:jun2011-07
    as

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    File URL: https://www.rba.gov.au/publications/bulletin/2011/jun/pdf/bu-0611-7.pdf
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    References listed on IDEAS

    as
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    5. Scott H. Irwin & Dwight R. Sanders, 2010. "The Impact of Index and Swap Funds on Commodity Futures Markets: Preliminary Results," OECD Food, Agriculture and Fisheries Papers 27, OECD Publishing.
    6. Vanessa Rayner & Emily Laing & Jamie Hall, 2011. "Developments in Global Food Prices," RBA Bulletin (Print copy discontinued), Reserve Bank of Australia, pages 15-22, March.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Commodity; Commodities; Commodity prices; Commodity price; volatility; Speculation; Oil prices; Financialisation; Financialization; G-20; G20; CRB; Derivatives;
    All these keywords.

    JEL classification:

    • G20 - Financial Economics - - Financial Institutions and Services - - - General

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