Raw Materials And The Natural Resources

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he world economy is based on the natural resources that are the raw materials and the world need this resources is increasing rapidly. raw materials can be traded and their size and quality have been standardized to be the commodities. there are three types of commodities, energy commodities, metal commodities and commodities. commodities markets have been created before 150 years in the united states and commodities trading had existed in Japan before more than a 1,000 years.Agricultural commodities were the first commodities traded.Nowadays, commodity trading represents around a quarter of the total world trade volume. \ A commodity is a good that can be traded (bought and sold) in commercial transactions between buyers and sellers…show more content…
nevertheless, financialization of commodities markets had created a large amounts of commodity assets and high returns and thus boost the commodities demand. as a result of the increasing interest in commodities, several institutions have created commodity indexes.\ \ commodity index is a fixed weighted average of selected commodity prices, which based on futures prices or spot prices. These indexes represent the board commodity asset prices for a certain commodity as gold, oil and wheat.\ \ Recently, most of commodities trading are over the counter (OTC) markets in which there is no formal markets or trading exchange and therefore no fixed sturdy regulations.\ \ Primarily, researches on commodity markets have focused on price changes and commodity risk. these studies are very significant because of the growing rule of commodities in the asset markets and as a result of the increasing volatility. Moreover, this importance is owing to the fact that commodity returns have specific characteristic as asymmetry, non-normal distribution and fat tails.(Chkili, Hammoudeh and Nguyen, 2014, p1)\ \ The global economy encounters series of collapses and booms in commodity prices. These booms have negatively influenced the commodities producers and consumers around the world. The OPEC-imposed oil embargo on the united States and Europe had resulted in the first collapse in the 1970 's. In the beginning of 2000 's commodities prices started to
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