@article{Irwin:126877,
      recid = {126877},
      author = {Irwin, Scott H.},
      title = {Does the Masters Hypothesis Explain Recent Food Price  Spikes?},
      address = {2012},
      number = {1007-2016-79590},
      pages = {38},
      year = {2012},
      abstract = {The Masters Hypothesis is the claim that unprecedented  buying pressure in recent years from
commodity index  investors created massive bubbles in food and energy  prices. A number of
recent studies investigate the  empirical relationship between index investment and  price
movements in agricultural futures markets. One line  of research uses time-series regression
tests, such as  Granger causality tests, to investigate the relationship  between price movements
and index positions. This research  provides little evidence in support of the Masters  Hypothesis
in agricultural futures markets. A second line  of research uses cross-sectional regression tests
and  studies in this area provide very limited evidence in favor  of the Masters Hypothesis for
agricultural futures markets.  A third line of research investigates whether there is a  significant
relationship between commodity index trading  and the difference, or spread, between futures
prices of  different contract maturities. These studies report a range  of results depending on the
type of test. However, the bulk  of the evidence indicates either no relationship or a  negative
relationship, which is once again inconsistent  with the Masters Hypothesis. Overall, this
growing body of  literature fails to find compelling evidence that buying  pressure from
commodity index investment in recent years  caused a massive bubble in agricultural futures
prices. The  Masters Hypothesis is simply not a valid characterization  of reality.},
      url = {http://ageconsearch.umn.edu/record/126877},
      doi = {https://doi.org/10.22004/ag.econ.126877},
}