Title: Economic impact of commodity financialization
Authors: Devraj Basu - Strathclyde Business School (United Kingdom) [presenting]
Abstract: The impact of financialization on commodity futures return distributions is studied. Over the period associated with financialization, we find shifts in the nature of volatility across the entire cross-section of commodities and shifts in the nature of the entire returns distribution across the agricultural and metals sectors. The effects of financialization appear to be the most profound on the metal sector and the altered nature of the metals return distributions appears to have transmitted itself to the mining sector, leading to simultaneous increases in capital expenditures which may have contributed to the recent value destruction in this sector.