Speculation, Embedding and Food Prices: A cointegration analysis A. Jason Windawi

The disparity between massive volatility of food prices and relatively slow changes in agricultural supply and demand since the beginning of the Food Crisis in 2007 has focused attention on the potential effect of financial speculators in food markets. Identifying the effect however is a complicated challenge because of number of factors, the key being the criteria to define speculative activity. The author provides a more targeted analysis of one particular kind of speculator, and builds on a combination of sociological and econometric analysis to identify their presence in commodity markets during the food crisis.

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