Global Liquidity, Financialization and Commodity Price Inflation

摘要

This paper examines the effect of global liquidity and financialization on commodity price inflation. The novelty of the paper lies in exploiting recent advances in our understanding of global liquidity by separating private liquidity from official liquidity and digging into disaggregated level non-commercial commodity traders data. Private liquidity is found to be inflationary, while official liquidity is not. Among the non-commercial traders, both, active money managers and passive swap dealers seem to have played an important role in commodity inflation dynamics during the period 2006-2012. The paper also discusses emerging policy issues in a rapidly changing global commodities market.