The large inflow of investment capital to commodity futures markets in the past decade has generated a heated debate aboutwhether 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.
|Number of pages
|Annual Review of Financial Economics
|Published - Dec 1 2014
All Science Journal Classification (ASJC) codes
- Economics and Econometrics
- Information discovery
- Risk sharing