Is Financial Speculation with Agricultural Commodities Harmful or Helpful? – A Literature Review of Current Empirical Research

Posted: 1 Oct 2013

See all articles by Matthias Georg Will

Matthias Georg Will

Martin Luther University of Halle-Wittenberg - Faculty of Economics and Business Administration

Sören Prehn

Leibniz Institute of Agricultural Development in Transition Economies (IAMO)

Ingo Pies

Martin-Luther-University Halle-Wittenberg

Thomas Glauben

University of Kiel

Date Written: September 29, 2013

Abstract

This literature survey comprises 35 empirical studies published between 2010 and 2012 that analyze the influence of financial speculation on the markets for agricultural commodities. According to the current state of research, there is little supporting evidence that the recent increase in financial speculation has caused either (a) of the price level, or (b) the price volatility in agricultural markets to rise. Rather, fundamental factors are responsible for this. Therefore, most papers are not in favor of, but against (c) erecting market barriers by regulation. Against this background, the public alarm, which claims that financial speculation has detrimental effects and should be forbidden, seems to be a false alarm. Those who are interested in fighting global hunger should take care of fundamental factors and take appropriate measures to keep supply in step with demand, which is likely to rise in the near future.

Keywords: financial speculation, futures market, agricultural commodities, regulation, position limits, transaction tax, volatility, price level

JEL Classification: D84, G12, G13, G14, Q13, Q18

Suggested Citation

Will, Matthias Georg and Prehn, Sören and Pies, Ingo and Glauben, Thomas, Is Financial Speculation with Agricultural Commodities Harmful or Helpful? – A Literature Review of Current Empirical Research (September 29, 2013). https://doi.org/10.3905/jai.2016.18.3.084. Available at SSRN: https://ssrn.com/abstract=2333076 or http://dx.doi.org/10.2139/ssrn.2333076

Matthias Georg Will (Contact Author)

Martin Luther University of Halle-Wittenberg - Faculty of Economics and Business Administration ( email )

Germany

Sören Prehn

Leibniz Institute of Agricultural Development in Transition Economies (IAMO) ( email )

Theodor-Lieser-Str.2
Halle, 06120
Germany

Ingo Pies

Martin-Luther-University Halle-Wittenberg ( email )

Grosse Steinstrasse 73
Halle/Saale, DE Saxony-Anhalt 06108
Germany
+49 0 345 55 23420 (Phone)

HOME PAGE: http://ethik.wiwi.uni-halle.de/2166_199920/2166_199912/

Thomas Glauben

University of Kiel ( email )

Department of Food Economics & Consumption Studies
D-24098 Kiel
Germany
+49 431 880-7372 (Phone)
+49 431 880-7308 (Fax)

Here is the Coronavirus
related research on SSRN

Paper statistics

Abstract Views
1,367
PlumX Metrics