2008/2
Commodities, Energy and Finance

edited by Ernest Gnan and Már Gudmundsson

A joint publication with the Austrian Society for Bank Research
This SUERF study summarizes the main findings and features most of the contributions from a workshop on “Commodities, Energy and Finance”, which was jointly organised by SUERF, the Oesterreichische Nationalbank and the Bankwissenschaftliche Gesellschaft at the OeNB’s premises in Vienna, on 3 March 2008. Over 100 participants from 16 countries followed a day of discussions on the nature and dynamics of commodity markets, on the relationships between financial, commodity and energy markets in Europe, on the challenges of oil wealth and on how monetary policy should take commodity and energy prices into account. The workshop brought together both professional and academic perspectives as well as financial, microeconomic and central banking views on the channels of mutual influence between commodities and energy markets as well as financial markets.

The workshop produced many interesting insights, although challenges remain. In particular, it highlighted the multiple relations between commodity and energy markets, on the one hand, and financial markets, on the other. However, it is still difficult to determine in real time whether commodity price developments are driven by fundamentals or financial activity, in other words, speculation. The optimal monetary response is also an issue for further investigation. Higher and more volatile energy and commodity prices pose multiple challenges for producers, consumers, financial intermediaries and policy makers. Careful evaluation is required to draw appropriate conclusions and devise adequate strategies in reply to these developments. In a longer term perspective, the analysis has to go beyond the traditional confines of economic analysis to produce wise and sustainable decisions. To fully capture the problems at hand, and provide lasting solutions e.g. to ensure long-term sustainable growth in a world of limited natural resources, a much broader, interdisciplinary approach is required. As usual, SUERF’s approach of bringing together academics researchers, financial practitioners and policy makers, proved useful in exposing the many facets of a complex topic and in providing synthesis of possible routes to follow in the future.
 
Chapters

Introduction, main findings, and some conclusions
Ernest Gnan and Már Gudmundsson

Opening Remarks
Klaus Liebscher

Financial investors and commodity markets
Dietrich Domanski and Alexandra Heath

European Energy Markets: Moving in a Common Direction?
Juan Delgado

Energy Markets in Europe: The State of Play and Future Prospects
Walter Boltz

Norges Bank’s Experiences with the Organisation of the Government Pension Fund – Global
Birger Vikøren

The Russian Oil Fund(s): past performance and policy options
Vasily Astrov

The Russian Non-Fuel Sector: Signs of Dutch Disease? Evidence from EU–25 Import Competition
Stephan Barisitz and Simon-Erik Ollus

Energy prices, inflation, and monetary policy
Ulrich Kohli

Monetary policy and commodity and energy prices
Irma Rosenberg

How should monetary policy take commodity and energy prices into account?
Frank Smets
  
Additional Info
Keywords: asset prices, climate change, commodity prices, competition, core inflation, country study, Dutch disease, energy policy, energy prices, energy, Europe, fiscal policy, foreign trade, internal market, international lending and debt, market integration, monetary policy, natural resource curse, regulation, Russia.
JEL Codes: E5, E6, E31, F11, F34, G11, G15, K21, K23, L43, L51, L53, L94, L95, O5, Q4, Q33, Q40, Q41, Q48, Q50,Q58
ISBN No.: 978-3-902109-42-2
Authors: Ernest Gnan,Mar Gudmundsson, Klaus Liebscher, Dietrich Domanski Alexandra Heath, Juan Delgado, Walter Boltz, Birger Vikøren, Vasily Astrov, Stephan Barisitz, Simon-Erik Ollus, Ulrich Kohli, Irma Rosenber, Frank Smets
Editors: Ernest Gnan and Már Gudmundsson

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Study 2008/2