Published Wednesday, November 29, 2006 by Robert P. Murphy
Forward and futures markets are yet another refinement in the growing complexity of a modern financial economy, writes Robert Murphy. By distilling the purely speculative aspect out of intertemporal transactions and placing this risk on those who want to bear it, forward and futures contracts foster a greater specialization in the division of labor. Even though the vast majority will never own such contracts, all consumers benefit from the more efficient allocation of resources and production decisions over time.
(Original Text)
The Social Function of Futures Markets (2.83 MB)