Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/45904
Authors: 
Reicher, Christopher Phillip
Utlaut, Johannes Friederich
Year of Publication: 
2011
Series/Report no.: 
Kiel Working Paper 1704
Abstract: 
Recent research has shown that economic conditions have an important effect on real commodity prices. We quantify the contribution of fluctuations in inflation to this particular link. In the data, a temporary rise in inflation causes real commodity prices to rise, as does a rise in trend inflation. We find that a simple dynamic equilibrium model of commodity supply and demand gives a realistic response of real commodity prices to inflation. Based on historical simulations, shocks to inflation played an important role in commodity price dynamics during the 1970s, but they have contributed negligibly to commodity price movements since then.
Subjects: 
Commodity prices
monetary policy
inflation
the 1970s
JEL: 
E31
E52
E65
Q00
Document Type: 
Working Paper

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