The Power of Prices: How Fast Do Commodity Markets Adjust to Shocks?
IMF Working Papers, April 16, 2024
Source details
- Canonical URL
- The Power of Prices: How Fast Do Commodity Markets Adjust to Shocks?
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Bibliographic details
- Authors: Christian Bogmans, Andrea Pescatori, Ivan Petrella, Ervin Prifti, Martin Stuermer
- Published: April 16, 2024
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9798400271953.001
Paper summary
- Establishes supply and demand elasticities for a broad set of commodities based on a consistent dataset and identification methodology.
- Applies granular IV methods to a new cross-country panel dataset of commodity production and consumption from 1960-2021.
- Core conclusion: commodity demand and supply are typically price inelastic.
Methodology
- Uses granular instrumental-variables (IV) methods.
- Employs a new cross-country panel dataset of commodity production and consumption spanning 1960-2021.
Key findings
- Demand and supply tend to be the most inelastic for minerals.
- Demand and supply are most elastic for agricultural commodities.
- Elasticities of energy commodities are intermediate between minerals and agricultural commodities.
- Supply and demand become more elastic at longer time horizons for mineral and energy commodities, but not for most agricultural commodities.
Subjects and keywords (as presented)
- Subjects: Agricultural commodities, Commodities, Consumption, Demand elasticity, Economic theory, National accounts, Supply elasticity
- Keywords: Agricultural commodities, agriculture, Commodities, commodity demand and supply, commodity demand and supply elastities, Consumption, demand, Demand elasticity, energy, energy commodity, Global, international trade, metals., mineral commodity, minerals, price elasticities, supply, supply and demand elasticity, Supply elasticity
Christian Bogmans, Andrea Pescatori, Ivan Petrella, Ervin Prifti, and Martin Stuermer; April 16, 2024.
Content in this bundle
- Working Paper