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Commodity price formation in boom-and-bust cycles. ECMI Commentary No. 29/June 2011

Archive of European Integration (AEI) (University of Pittsburgh)Published 1 June 2011Open access
Diego Valiante
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Abstract

The sharp and widespread increase in most commodity prices has alarmed the world and raised questions around the sustainability of our economies. As shown in this ECMI Commentary, the reasons for this dramatic rise are multiple, and engaging in a witch-hunt benefits neither the market as a whole nor our economies. Solutions need to be more differentiated and oriented towards two factors: preventing price manipulation (through controls on net positions and on anti-competitive market structures) and fostering sustainability.

Keywords

Economics, Econometrics and FinanceEnergy