How Persistent Are Shocks to World Commodity Prices?
June 1, 1999
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Summary
This paper examines the persistence of shocks to world commodity prices, using monthly IMF data on primary commodities between 1957–98. We find that shocks to commodity prices are typically long–lasting and the variability of the persistence of price shocks is quite wide. The paper also discusses the implications of these findings for national and international schemes to stabilize earnings from commodity exports and finds that if price shocks are long–lived, then the cost of stabilization schemes will likely exceed any associated smoothing benefits.
Subject: Agricultural commodities, Commodities, Commodity price shocks, Commodity prices, International commodity agreements, International trade, Prices
Keywords: Africa, Agricultural commodities, commodity price, Commodity price shocks, Commodity prices, export earnings, International commodity agreements, median-unbiased estimation, nonfuel commodities index, nonfuel commodity, price series, price shock, price stabilization, shock persistence, stabilization scheme, WP
Pages:
54
Volume:
1999
DOI:
Issue:
080
Series:
Working Paper No. 1999/080
Stock No:
WPIEA0801999
ISBN:
9781451850284
ISSN:
1018-5941
