Does speculation force up commodity prices? (in German)

Soaring prices on commodity markets gained attention of policy circles and the wider public as disruptive consequences for consumers and producers are expected to appear particularly in emerging market economies. At the same time, international investment banks engaged in heavy trading on futures markets leading to a so-called ‘financialization’ of commodity markets. This coincidence often led commentators to blame financial institutions for the observed bubble-like price developments. The empirical analysis by the Kiel economists Karl Finger and Stefan Reitz, however, cannot confirm a significant price impact of financial traders’ activities on commodity prices. The results suggest that futures markets resemble betting shops typically having little influence on the horse race itself.