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An evidence of speculation in Indian commodity markets

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  • Varadi, Vijay Kumar

Abstract

Recent price surge in commodity markets has stipulate intensity of various factors which lead price volatility. There are multi-factors such as traditional supply and demand factors, excess global liquidity i.e., monetary inflows in commodity markets and financialization i.e., financial investors (portfolio investment and speculation) attitude. This paper is an attempt to investigate for the evidence and its impact of speculation on volatility of commodity prices in Indian commodity markets. Overall, results show that speculation has played decisive role in the price bubble during the global crisis.

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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 38337.

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Date of creation: Mar 2012
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Handle: RePEc:pra:mprapa:38337

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Keywords: Commodity Markets; Speculation; Price Volatility; Financialization and Investor’s behaviour;

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  1. Baffes, John & Haniotis, Tassos, 2010. "Placing the 2006/08 commodity price boom into perspective," Policy Research Working Paper Series 5371, The World Bank.
  2. Sims, Christopher A, 1980. "Macroeconomics and Reality," Econometrica, Econometric Society, vol. 48(1), pages 1-48, January.
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  11. Paul Davidson, 2008. "Crude Oil Prices: >i>"Market Fundamentals" or Speculation?>/i>," Challenge, M.E. Sharpe, Inc., vol. 51(4), pages 110-118, July.
  12. Working, Holbrook, 1960. "Speculation on Hedging Markets," Food Research Institute Studies, Stanford University, Food Research Institute, issue 02, May.
  13. L. Randall Wray, 2009. "Money Manager Capitalism and the Global Financial Crisis," Economics Working Paper Archive wp_578, Levy Economics Institute.
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  16. Christopher A. Sims, 1986. "Are forecasting models usable for policy analysis?," Quarterly Review, Federal Reserve Bank of Minneapolis, issue Win, pages 2-16.
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