Analyze the Impact of International Commodity Prices on Inflation

Abstract

With the development of globalization, the fluctuation of international commodity prices has an important impact on the global economy. By examining price data for major commodities such as crude oil, soybeans, copper, and gold between 2018 and 2023, and exploring the transmission mechanism to inflation in different countries, we attempt to uncover the nature of this effect. By analyzing the transmission path of commodity prices to inflation, we delve into how these commodity price fluctuations affect inflation levels in different countries.This article find that its price fluctuations tend to cause a chain reaction around the world, which has an important impact on inflation. However, we also recognize that the impact of international commodities on inflation is subject to a combination of many factors. Domestic economic conditions, the flexibility of monetary policy, the balance of supply and demand in the market and other factors also have an important impact on inflation. Therefore, in this study, we try to consider these factors in order to explain the formation mechanism of inflation more comprehensively. In the future, we recommend paying closer attention to the dynamics of international commodity markets and their complex relationship with inflation to better address global economic challenges.