The Financial Crisis and U.S. Agriculture
In recent years, United States’ financial markets have been involved in a state of turmoil which has quickly spread, domestically and internationally. In 2008, the prices of several major agricultural commodities experienced extreme volatility. Is the timing of the price movements and patterns seen in agricultural commodities and the credit problems experienced by financial institutions a matter of chance or is there a connection within the two markets; specifically, is there a cause and effect relationship between the two? This research involved an extensive analytical analysis of relevant literary resources pertaining to the issue at hand. In addition, a statistical analysis of futures settlement contracts for corn, provided by the Chicago Board of Trade (CBOT), from 1989 through 2008, will be conducted, as well. The purpose of this paper is to establish and provide a background for future research regarding the events of the financial crisis and the volatility experienced in agricultural commodity markets in 2008. Overall, this research will be useful in providing further implications concerning, not only the agriculture sector, but the economy as a whole.