Monetary Policy, Commodity Prices and Inflation - Empirical Evidence from the US

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. The working papers published in the Series constitute work in progress circulated to stimulate discussion and critical comments. Views expressed represent exclusively the authors' own opinions and do not necessarily refl ect those of the editors. Terms of use: Documents in Ruhr Economic Papers #216

Assessment of the Impact of Hard Commodity Prices Changes on Inflation in European Union Countries

“…As inflation is often accompanied by several economic and social problems such as relative price shifts or a transfer of wealth from lenders to borrowers, defending price stability is a common main goal of economic and social politics (Verheyen, 2010). Cogoljevic, Gavrilovic, Roganovic, Matic, and Piljana (2018) stated that inflation represents an increase in the general price level or a decrease in the value of money and the typical behaviour of inflation and inflation transmission process was analysed by Sinicakova, Sulikove, Horvath, Gazda, and Grof (2011), Schwarzer (2018) and Bouchaud, Gualdi, Tarzia, and Zamponi (2017).…”

“…Kyrtsou and Labys (2006), in their study, presented the relationship between inflation and commodities as nonlinear and chaotic which was expanded upon by Krichene (2008) who stated that low-interest rates nowadays compared to the period of the 1970s and 1980s, when interest rates were high, can explain why the relation between inflation and commodity prices could be named as weak. Verheyen (2010) and Gaudenzi and Bucciol (2016) emphasized the fact that producers who encounter lower interest rates can deal with higher commodity prices more easily. In other words, in some industrial countries, low inflation could be another reason for a minor influence of commodity price fluctuation on economic performance (De Gregorio, Landerretche, and Neilson, 2007).…”

“…As purchasing power decreases, so-called inflation appears. Verheyen (2010) considered that the discussion about the relation between the prices of commodities and inflation started in the 1970s when inflation was high and that in the aftermath the relationship was not as prevalent amongst available data. Nevertheless, in recent decades where inflation has increased and the prices of commodities have several times reached a peak, the discussion has been renewed.…”

Do fiscal shocks explain bond yield in high- and low-debt economies?

“…That is, the error terms in the regression are constructed to be uncorrelated to each other. As presented by Verheyen (2010), the SVAR model includes a number of endogenous variables, a constant and a structural shock ε t :…”

External cycles and commodities in Latin America and the Caribbean: a cointegration analysis with breaks

“…As a first approach, we look how close in time are the structural breaks of two of the main macroeconomic variables of the external sector for Latin American countries with the breaks experienced by commodity prices in the same period. However, some recent studies find that the predictive power of commodity prices for inflation has significantly decreased since the mid-1980s (Herrera & Pesavento, 2009;Verheyen, 2010).…”