<abstract xmlns="http://www.w3.org/1999/xhtml"><p> Stability in supply of commodities is essential for manufacturing and doing business. This fact is unchangeable despite the passage of time and only the ways of trading of commodities differ. Especially in recent decades, the global economy has changed significantly and one of the major factors fueling its transformation is financialization. This phenomenon, gaining importance with the beginning of the 21st century, affects all areas of the economy. Commodity markets are not free of it either. This leads to various structural changes in terms of ways of trading, price formation and volatility in commodity markets. The aim of this article is to investigate the roots of financialization of commodity markets, and to assess its influence on their stabilitythrough investigation of time series data from 1991 to 2015 and examining correlation coefficients. The results of the study conducted for the purposes of this article depict not only the volatility of commodity markets, but also a positive correlation between prices of major commodities over the examined period and a positive correlation between prices of major commodities and equity markets from 2009 up to 2012, thus the period of recovery after the subprime mortgage crisis.</p></abstract>

Stability in supply of commodities is essential for manufacturing and doing business. This fact is unchangeable despite the passage of time and only the ways of trading of commodities differ. Especially in recent decades, the global economy has changed significantly and one of the major factors fueling its transformation is financialization. This phenomenon, gaining importance with the beginning of the 21st century, affects all areas of the economy. Commodity markets are not free of it either. This leads to various structural changes in terms of ways of trading, price formation and volatility in commodity markets. The aim of this article is to investigate the roots of financialization of commodity markets, and to assess its influence on their stabilitythrough investigation of time series data from 1991 to 2015 and examining correlation coefficients. The results of the study conducted for the purposes of this article depict not only the volatility of commodity markets, but also a positive correlation between prices of major commodities over the examined period and a positive correlation between prices of major commodities and equity markets from 2009 up to 2012, thus the period of recovery after the subprime mortgage crisis.

Financialization and Commodity Market Stability

Financial Internet Quarterly

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 License.

{"article-title":"Financialization and Commodity Market Stability"}

Stability in supply of commodities is essential for manufacturing and doing business. This fact is unchangeable despite the passage of time and only the ways...

Financialization and Commodity Market Stability

Publié en ligne: 01 août 2017

Pages: 33 - 42

Reçu: 08 août 2015

Accepté: 30 déc. 2016

DOI: https://doi.org/10.1515/fiqf-2016-0006

Mots clés
commodity markets, financialization, financial stability

© 2017

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 License.

Financialization and Commodity Market Stability

Publié en ligne: 01 août 2017

Pages: 33 - 42

Reçu: 08 août 2015

Accepté: 30 déc. 2016

DOI: https://doi.org/10.1515/fiqf-2016-0006

Mots cléscommodity markets, financialization, financial stability

© 2017

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 License.

Mots clés
commodity markets, financialization, financial stability