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Submitted by Boussard on
Interesting contribution: How can we found the original article (the link is not responding !) ? Regarding agricultural commodities, I am pretty sure financialization did not play a large role in the price surge. See "Should agriculture be liberalized?" Science publishers, Enfield (NH) , by J.M. Boussard, F. Gerard ans MG Piketty : the whole story had been fairly well reproduced in 2005 by a recursive MCEG model starting from the GTAP 2001 data base. The model was deprived from any speculation submodel, which means that speculation was not necessary in order to explain what happenned. Actually, the lesson of the model is that the whole thing can be explained from the fact that world prices had been extreemely low during the last ten years before 2006. As a consequence, farmers did not invest. It was not apparent as long as public stocks existed. But when the public stocks were exhausted, the surge occured...Thus, it is a mere classical cobweb phenomenon... I am bound to suppose a similar mechanism is at work with petrol...