Impact of Commodity Index Investments on Agricultural Commodity Price Increases Over 2006-2011 Period PDF Download
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Author: Velmurugan Palaniappan Shanmugam
Publisher:
ISBN:
Category :
Languages : en
Pages : 22
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Book Description
Although prices in the agricultural commodity futures markets have risen significantly in recent years, the results of this study support those of many previous studies that concluded that investments of commodity index traders and speculators in the futures markets are not the major causes of the price increases. While the analyses in this study do not directly test for price impacts, the results of the ratio analyses, “T” indexes, and Granger Causality tests show that there is no “excess speculation” in the commodities futures markets. However, the ratio and speculative index results revealed a small level of abnormality only in CBOT wheat and CME feeder cattle markets. The Granger Causality tests revealed that index investments do not Granger cause futures prices in 9 out of the 12 commodities. Index investments Granger caused futures prices only in CBOT corn and CME feeder cattle markets. These results debunk the assertion that speculators are to be blamed for the recent increases in commodity prices and that their activities in the futures markets must be curbed. Indeed, the results of this study indicate the possibility that speculators and commodity index traders potentially play appropriate roles in the futures markets by providing liquidity needed for the smooth functioning of the markets.The results of the study imply that commodity index traders in agricultural commodities do not change futures markets primarily from hedging to “excessive” speculative markets. As a result, the potential causes of the recent price spikes in agricultural commodities may potentially be the results of market fundamentals. Consequently, recent proposed government policies and programs aimed at curbing speculation in the commodities and futures market may potentially be counterproductive in terms of needed liquidity in the markets to ensure stable price levels and market stability.
Author: Velmurugan Palaniappan Shanmugam
Publisher:
ISBN:
Category :
Languages : en
Pages : 22
Get Book Here
Book Description
Although prices in the agricultural commodity futures markets have risen significantly in recent years, the results of this study support those of many previous studies that concluded that investments of commodity index traders and speculators in the futures markets are not the major causes of the price increases. While the analyses in this study do not directly test for price impacts, the results of the ratio analyses, “T” indexes, and Granger Causality tests show that there is no “excess speculation” in the commodities futures markets. However, the ratio and speculative index results revealed a small level of abnormality only in CBOT wheat and CME feeder cattle markets. The Granger Causality tests revealed that index investments do not Granger cause futures prices in 9 out of the 12 commodities. Index investments Granger caused futures prices only in CBOT corn and CME feeder cattle markets. These results debunk the assertion that speculators are to be blamed for the recent increases in commodity prices and that their activities in the futures markets must be curbed. Indeed, the results of this study indicate the possibility that speculators and commodity index traders potentially play appropriate roles in the futures markets by providing liquidity needed for the smooth functioning of the markets.The results of the study imply that commodity index traders in agricultural commodities do not change futures markets primarily from hedging to “excessive” speculative markets. As a result, the potential causes of the recent price spikes in agricultural commodities may potentially be the results of market fundamentals. Consequently, recent proposed government policies and programs aimed at curbing speculation in the commodities and futures market may potentially be counterproductive in terms of needed liquidity in the markets to ensure stable price levels and market stability.
Author: Thomas Glauben
Publisher:
ISBN:
Category :
Languages : de
Pages :
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Book Description
Author: Matthias Kalkuhl
Publisher: Springer
ISBN: 3319282018
Category : Business & Economics
Languages : en
Pages : 620
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Book Description
This book provides fresh insights into concepts, methods and new research findings on the causes of excessive food price volatility. It also discusses the implications for food security and policy responses to mitigate excessive volatility. The approaches applied by the contributors range from on-the-ground surveys, to panel econometrics and innovative high-frequency time series analysis as well as computational economics methods. It offers policy analysts and decision-makers guidance on dealing with extreme volatility.
Author: Organisation for Economic Co-operation and Development
Publisher: Organisation for Economic Co-operation and Development
ISBN: 9789264154698
Category : Business & Economics
Languages : en
Pages : 134
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Book Description
Author: International Monetary Fund. Research Dept.
Publisher: International Monetary Fund
ISBN: 1475507038
Category : Business & Economics
Languages : en
Pages : 299
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Book Description
The April 2012 issue of the World Economic Outlook assesses the prospects for the global economy, which has gradually strengthened after a major setback during 2011. The threat of a sharp global slowdown eased with improved activity in the United States and better policies in the euro area. Weak recovery will likely resume in the major advanced economies, and activity will remain relatively solid in most emerging and developing economies. However, recent improvements are very fragile. Policymakers must calibrate policies to support growth in the near term and must implement fundamental changes to achieve healthy growth in the medium term. Chapter 3 examines how policies directed at real estate markets can accelerate the improvement of household balance sheets and thus support otherwise anemic consumption. Chapter 4 examines how swings in commodity prices affect commodity-exporting economies, many of which have experienced a decade of good growth. With commodity prices unlikely to continue growing at the recent elevated pace, however, these economies may have to adapt their fiscal and other policies to lower potential output growth in the future.
Author: Neil Shephard
Publisher: Oxford University Press, USA
ISBN: 0199257205
Category : Business & Economics
Languages : en
Pages : 534
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Book Description
Stochastic volatility is the main concept used in the fields of financial economics and mathematical finance to deal with time-varying volatility in financial markets. This work brings together some of the main papers that have influenced this field, andshows that the development of this subject has been highly multidisciplinary.
Author: Takatoshi Ito
Publisher: University of Chicago Press
ISBN: 0226386899
Category : Business & Economics
Languages : en
Pages : 346
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Book Description
Fluctuations of commodity prices, most notably of oil, capture considerable attention and have been tied to important economic effects. This book advances our understanding of the consequences of these fluctuations, providing both general analysis and a particular focus on the countries of the Pacific Rim.
Author: Joshua S. Graff Zivin
Publisher: University of Chicago Press
ISBN: 0226988031
Category : Art
Languages : en
Pages : 310
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Book Description
Using economic models and empirical analysis, this volume examines a wide range of agricultural and biofuel policy issues and their effects on American agricultural and related agrarian insurance markets. Beginning with a look at the distribution of funds by insurance programs—created to support farmers but often benefiting crop processors instead—the book then examines the demand for biofuel and the effects of biofuel policies on agricultural price uncertainty. Also discussed are genetically engineered crops, which are assuming an increasingly important role in arbitrating tensions between energy production, environmental protection, and the global food supply. Other contributions discuss the major effects of genetic engineering on worldwide food markets. By addressing some of the most challenging topics at the intersection of agriculture and biotechnology, this volume informs crucial debates.
Author: Craig Pirrong
Publisher: Cambridge University Press
ISBN: 1139501976
Category : Business & Economics
Languages : en
Pages : 238
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Book Description
Commodities have become an important component of many investors' portfolios and the focus of much political controversy over the past decade. This book utilizes structural models to provide a better understanding of how commodities' prices behave and what drives them. It exploits differences across commodities and examines a variety of predictions of the models to identify where they work and where they fail. The findings of the analysis are useful to scholars, traders and policy makers who want to better understand often puzzling - and extreme - movements in the prices of commodities from aluminium to oil to soybeans to zinc.
Author: Mr. Ravi Balakrishnan
Publisher: International Monetary Fund
ISBN: 1484326091
Category : Business & Economics
Languages : en
Pages : 123
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Book Description
Over the past decades, inequality has risen not just in advanced economies but also in many emerging market and developing economies, becoming one of the key global policy challenges. And throughout the 20th century, Latin America was associated with some of the world’s highest levels of inequality. Yet something interesting happened in the first decade and a half of the 21st century. Latin America was the only region in the World to have experienced significant declines in inequality in that period. Poverty also fell in Latin America, although this was replicated in other regions, and Latin America started from a relatively low base. Starting around 2014, however, and even before the COVID-19 pandemic hit, poverty and inequality gains had already slowed in Latin America and, in some cases, gone into reverse. And the COVID-19 shock, which is still playing out, is likely to dramatically worsen short-term poverty and inequality dynamics. Against this background, this departmental paper investigates the link between commodity prices, and poverty and inequality developments in Latin America.
