Financialization of Commodities Sparks Non-Linear Price Adjustments, Impacting Global Economy.
Commodity prices have been volatile in recent years, with a rapid growth followed by a sudden drop during the financial crisis of 2008. This study looks at the factors influencing these price movements, focusing on the impact of financial markets and non-linear dynamics. The researchers suggest that the financialization of commodities may affect short-term prices but not long-term values. They also find that global demand, the value of the US Dollar, and monetary conditions in developed countries play important roles in determining commodity prices. Their model shows that both macroeconomic fundamentals and non-linear price adjustments are significant in understanding commodity price movements.