In their paper How Wall Street Speculation is Driving Up Gasoline Prices Today Robert Pollin, UMass Amherst economics professor and co-director of the Political Economy Research Institute (PERI) and James Heintz, associate director and associate research professor of PERI, show that a major factor contributing to the recent run up in gasoline prices at the pump is large-scale speculative trading in crude oil in the commodities futures market. They estimate that, for the month of May, the rise in speculative trading on oil has led to an 83-cent-per-gallon premium on gas prices at the pump. Pollin and Heintz emphasize that the federal government, and specifically the Commodities Futures Trading Commission, has the authority to control excessive speculation on oil through provisions in the Dodd-Frank Financial Reform Act, and must now exercise that authority. Their paper is the focus of a New York Times Dealbook article on high gas prices.
Download How Wall Street Speculation is Driving Up Gasoline Prices Today by Robert Pollin and James Heintz