Changes In Commodity Prices Research Articles

Commodity prices and economic growth: Empirical evidence from countries with different income groups

The purpose of this paper is to examine the effect of global commodity prices such as beverage, energy, fertilizer, food, metal and mineral, precious metal and agricultural raw material on GDP per capita of countries with different income levels which are low, lower-middle, upper-middle, and high. The results of the study using panel system GMM method over the period 2007–2021 showed that for all income group countries, the impact of energy and fertilizer prices on GDP per capita is negative, while the impact of food and metal and mineral prices is positive on GDP per capita. The study also found that rising prices of agricultural raw materials reduces GDP per capita of all income group countries except lower-middle income countries. Moreover, according to the results of the study, rising beverage prices increased the GDP per capita only of high-income countries, while rising precious metal prices decreased the GDP per capita of lower-middle and high-income countries. The study revealed that price changes in all commodity groups have an impact on the GDP per capita of high-income countries. It is demonstrated that price changes in all commodity groups have an impact in both directions on the GDP per capita of all income groups, depending on whether they are net producers or net consumers. The results of the study showed that, contrary to the literature, the countries most affected by commodity prices are high-income countries. Based on the empirical findings, this study point to the need for international cooperation to minimize the adverse effects of commodity price changes.

The Effects of Energy Commodities on CPI

From 2021-2023, the US saw a period of unparalleled inflation. Prompted by the debate on the role of energy prices, this paper investigates the role of rising energy commodities in this inflationary trend. Focusing on the Consumer Price Index (CPI-U), we explore the direct and indirect effects of energy commodity price changes. Despite the sector's 3-5% CPI weight, energy commodities exhibit significant volatility, contributing to 30% of monthly inflation fluctuations on average. The study identifies Gasoline and Fuel oil, both crude oil derivatives, as key components. Additionally, we assess the secondary pass-through effects, mainly through the transportation and industrial sectors. This research provides insights into the substantial impact of energy commodities on inflation and encourages further exploration on this topic, which can enhance economic forecasts and possibly monetary policy forecasts.

Fluktuasi Nilai Eksport dan Impor Minyak dan Gas Penerapan Permendag No 21 Tahun 2019 Berbasis Nilai Nilai Kebangsaan UUD 1945 Untuk Stabilisasi Ekonomi Dalam Negri.

Various factors, including changes in commodity prices, domestic production, trade policies, and geopolitical considerations, can impact the value of oil and gas imports and exports. In addition to technological innovation, economic fluctuations can also be influenced by changes in global demand, domestic production, and trade policies. The value of oil and gas imports and exports may experience fluctuations over time and between nations. The Perdag No. 21 of 2019 and the Constitution of the Republic of Indonesia No. 22 of 2001 pertaining to oil and natural gas govern export and import regulations, respectively. These documents provide a clear framework for the management of oil and natural gas resources in Indonesia and aim to harmonize regulations in the oil and gas sector. Natural gas, in addition to enhancing industry oversight and transparency, should be subject to scrutiny, as economic development can be influenced by export and import revenues. The government can subsequently manipulate this information to curb inflation, thereby contributing to the preservation of the nation's economic stability.

IP, limited release and premium consumption: evidence from Generation Z

PurposeThe purpose of this study is to investigate the influence of IP (Intellectual Property) on the intention for premium consumption of Generation Z, and to construct a theoretical model of IP on the premium consumption of Generation Z. Based on the results of the study, it provides better marketing suggestions to merchants, and is an expansion of previous research on the consumption behavior of Generation Z.Design/methodology/approachThis paper contains two empirical tests and one experimental analysis. First, this study crawl over 5,000 pieces of Generation Z’s consumption data from Poizon, an e-commerce platform and exclusive trending community for Generation Z. Second, this study designs a two-group online experiment to collect 292 valid data from members of the Generation Z. The authors use Stata software for multiple linear regression, t-tests, and ANOVA to test the hypotheses.FindingsThe results of the data analysis show that IP has a significant positive effect on the premium consumption intention of Generation Z, and the limited release strategy positively moderates the effect. Self-image congruence and social identification play mediating role in the influence of IP on Generation Z’s premium consumption.Originality/valueFirst, this study finds a link between IP and commodity premiums, which is the first study to explore the effect of IP on commodity price changes. Second, this study is the first to examine the marketing science value of IP using a combination of empirical tests and experimental analysis. These fill research gaps. Finally, the mechanism of IP’s influence on Generation Z’s premium consumption is revealed, enriching the literature on Generation Z’s consumption behavior.

Reprint of “Unveiling the dance of commodity prices and the global financial cycle”

We examine the impact of commodity price changes on the business cycles and capital flows in emerging markets and developing economies (EMDEs), distinguishing between their role as a source of shock and as a channel of transmission of global shocks. Our findings reveal that surges in export prices, triggered by commodity price shocks, boost domestic GDP, an effect further amplified by the endogenous decline of country spreads. However, the effects on capital flows appear muted. Shifts in U.S. monetary policy and global risk appetite drive the global financial cycle in EMDEs. Eased global credit conditions, attributed to looser U.S. monetary policy or lower global risk appetite, lead to a rise in export prices, higher output, a decrease in government borrowing costs, and stimulate greater capital flows. The endogenous response of export prices amplifies the output effects of a more accommodative U.S. monetary policy while country spreads magnify the impact of shifts in global risk appetite.

Analysing the Factors Behind Exchange Rate Fluctuations in India

Abstract: The study gives an overview of the various determinants of the exchange rate movements in India. Out of the multiple factors affecting the Rupee-Dollar value the impact of Interest rate differential, Trade deficit of India, Foreign Net investment inflows to India, Oil prices, and Gold prices (in the short term) on the exchange rate has been studied using Regression analysis and correlation and the role they played by the above mentioned variables in determining the exchange rate during the Global Financial Crisis of 2008-2010 and during the Covid-19 Period from 2020-2023. Exchange rate fluctuations play a crucial role in shaping the economy of a country, and India is no exception. The exchange rate of the Indian rupee against major world currencies is subject to constant fluctuations, influenced by a multitude of domestic and global factors. These fluctuations have significant implications for various stakeholders, including businesses, consumers, investors, and policymakers. Several factors contribute to the exchange rate fluctuations in India. One of the primary factors is the demand and supply dynamics of foreign exchange. Factors such as trade balance, foreign direct investments, portfolio investments, remittances impact the demand for and supply of foreign currency, Crude oil prices, Gold prices, and thereby affecting the exchange rate. In addition, macroeconomic variables like inflation, interest rates, and economic growth also play a crucial role in determining exchange rate movements. For instance, a high inflation rate in India compared to trading partner countries can lead to a depreciation of the rupee. Global economic conditions and geopolitical events are other significant factors influencing exchange rate fluctuations in India. Economic developments in major trading partners, changes in global commodity prices, and geopolitical tensions can all impact investor sentiment and capital flows, leading to fluctuations in the exchange rate. For example, uncertainties related to Brexit or trade tensions between major economies can trigger volatility in currency markets. Monetary policy decisions by the Reserve Bank of India (RBI) also play a crucial role in influencing exchange rates. Interest rate changes, open market operations, and forex interventions by the central bank can impact the value of the rupee visa-vis other currencies. The RBI often intervenes in the foreign exchange market to stabilize the rupee or prevent extreme volatility. Apart from these factors, market speculation, investor sentiment, and technological advancements in the financial markets can also contribute to exchange rate fluctuations. High-frequency trading, algorithmic trading, and the use of complex financial instruments by market participants can amplify exchange rate movements and increase volatility

Various optimized machine learning techniques to predict agricultural commodity prices

AbstractRecent increases in global food demand have made this research and, therefore, the prediction of agricultural commodity prices, almost imperative. The aim of this paper is to build efficient artificial intelligence methods to effectively forecast commodity prices in light of these global events. Using three separate, well-structured models, the commodity prices of eleven major agricultural commodities that have recently caused crises around the world have been predicted. In achieving its objective, this paper proposes a novel forecasting model for agricultural commodity prices using the extreme learning machine technique optimized with the genetic algorithm. In predicting the eleven commodities, the proposed model, the extreme learning machine with the genetic algorithm, outperforms the model formed by the combination of long short-term memory with the genetic algorithm and the autoregressive integrated moving average model. Despite the fluctuations and changes in agricultural commodity prices in 2022, the extreme learning machine with the genetic algorithm model described in this study successfully predicts both qualitative and quantitative behavior in such a large number of commodities and over such a long period of time for the first time. It is expected that these predictions will provide benefits for the effective management, direction and, if necessary, restructuring of agricultural policies by providing food requirements that adapt to the dynamic structure of the countries.

The Impact of COVID-19 on the US Consumer Price Index (CPI)

This research investigates the profound impact of irregular commodity price changes during unusual circumstances, particularly focusing on the COVID-19 pandemic. The research stems from the recognition that global events have the potential to trigger irregular and drastic changes in commodity prices. This research holds significant implications for both consumers and policymakers in navigating the complexities of global crises. The research employs the Consumer Price Index (CPI) as a crucial indicator to chart drastic changes in consumer product prices from January 2019 to September 2023. To establish a baseline, CPI data from January 2010 to December 2018 is utilized, and an Autoregressive Integrated Moving Average (ARIMA) model is employed to forecast hypothetical CPI for the target period. The comparison between forecasted and observed CPI data reveals the vast influence of the COVID-19 pandemic on consumer prices. This research explores various subcategories of CPI, emphasizing sectors such as Food and Beverage, Transportation, Housing, and Medical Care. The research found that COVID-19 leads to delays and lagging effects in certain sectors reflecting the overall increase in consumer product prices. The Medical Care CPI also exhibited the most complexity, reflecting the immediate and direct impact of the pandemic on healthcare costs.

Dinamika Pasar Komoditas Pangan Strategis: Analisis Fluktuasi Harga Dan Produksi

This study was conducted in Garut Regency to evaluate the production and prices of strategic food commodities. The goal is to provide data to stakeholders to manage food needs. The research method used time series data analysis of agricultural production and prices collected from relevant agencies. The analysis results showed significant production fluctuations in several key commodities such as large red chili, cayenne pepper, and shallots. These fluctuations affect the prices of food commodities, especially cayenne pepper which experiences high fluctuations. The research also highlights the importance of price management to maintain regional economic stability. Changes in food commodity prices have an important impact, helping the government forecast inflation and serving as a selling price guideline for traders. However, delays in information on price fluctuations can make it difficult for the public and related parties to make decisions. Therefore, efforts are needed to provide better and more timely market information. With complete information, the government and market players can take appropriate steps to maintain economic stability and adequate food availability for the community. This shows the importance of analyzing data on food commodity price changes in decision-making and policy planning at the national level.

Sentiment and energy price volatility: A nonlinear high frequency analysis

This study investigates the volatility dynamics of oil and gas prices in an environment characterized by post-coronavirus disease 2019 recovery, uncertainty, high inflation, and geopolitical tensions. Unlike previous studies, we examine a long-run series of high-frequency data on gas and oil prices from July 2007 to May 2022, which provides more than one million observations with which to analyze volatility. We compute realized volatility (RV) and decompose it into continuous volatility and jumps. We then investigate the relationship between uncertainty, investor sentiment, and RV, as well as its main components. Econometrically, we extend the heterogeneous autoregressive model of Corsi (2009) while considering not only disaggregate proxies for volatility (jumps and continuous volatility) and introducing uncertainty and heterogeneous investor sentiment, but also by allowing the model to include asymmetry, nonlinearity, and time variation according to the regime under consideration. Our results present three main findings. First, we find significant evidence of volatility decomposition, suggesting that both markets are characterized by significant jumps. Second, we show that trading volume, extra-financial news (uncertainty, investor sentiment), and jumps appear to drive commodity price volatility. Third, we find evidence of nonlinearity and threshold effects on energy price volatility. These findings are relevant for policymakers, regulators, investors, and portfolio managers, as they enable them to better characterize and forecast changes in commodity prices.

Unveiling the dance of commodity prices and the global financial cycle

We examine the impact of commodity price changes on the business cycles and capital flows in emerging markets and developing economies (EMDEs), distinguishing between their role as a source of shock and as a channel of transmission of global shocks. Our findings reveal that surges in export prices, triggered by commodity price shocks, boost domestic GDP, an effect further amplified by the endogenous decline of country spreads. However, the effects on capital flows appear muted. Shifts in U.S. monetary policy and global risk appetite drive the global financial cycle in EMDEs. Eased global credit conditions, attributed to looser U.S. monetary policy or lower global risk appetite, lead to a rise in export prices, higher output, a decrease in government borrowing costs, and stimulate greater capital flows. The endogenous response of export prices amplifies the output effects of a more accommodative U.S. monetary policy while country spreads magnify the impact of shifts in global risk appetite.

Economic Instability and Global Market Fluctuations in 2023: Analyzing Causes, Impacts, and Policy Responses

The economic instability and global market fluctuations that will occur in 2023 have created various complex economic challenges and have far-reaching impacts. These dynamics are influenced by various factors, including monetary and fiscal policies, the impact of the COVID-19 pandemic, geopolitical conflicts, and changes in commodity prices. The impact of this instability can be seen in financial markets, macroeconomics, business and industrial sectors, and has significant socio-economic consequences. This research aims to analyze the causes, impacts, and policy responses to economic instability and global market fluctuations in 2023. The method used is a descriptive qualitative approach with data obtained from various relevant research results or previous studies. Data processing is carried out carefully to ensure accurate and in-depth analysis. The results of this research show that the combination of the impact of monetary and fiscal policies, the ongoing influence of the COVID-19 pandemic, geopolitical dynamics, and changes in commodity prices have contributed to global economic instability. This impact is manifested in financial market volatility, macroeconomic disruption, as well as impacts on business and industrial sectors. Socioeconomic consequences such as increasing poverty and income inequality underscore the need for effective policy responses. The policy responses taken include monetary policy strategies, fiscal measures, structural reforms, and international cooperation.

The Impact of Security Issues Related to the War in Ukraine on World Trade Transformations

The article is devoted to the impact of security issues related to the global conflict, located in Ukraine, on the world trade transformations.
 The objective of the paper is twofold: first, to analyze the impact of the conflict on energy and food security in the context of changes in the world commodity prices and global modifications in the energy supply chains; second, to reveal the trade flows transformation in the world economy system and to substantiate the need to modernize the international institutions.
 The methodological basis of the research is the system approach: the methods of economic and statistical analysis combined with graphical method are used to determine the world commodity prices dynamics, as well as world commodity prices indices; the historical-logical method along with the analysis of economic phenomena and processes are used to assess the prerequisites for changes in world trade development and to reveal the need to revise the Washington Consensus, to transform the WTO.
 The conflict in Ukraine put pressure on security issues on a global scale, starting with food and energy security which resulted in trade flows transformations contributing to dividing the world into blocs. The confrontation forced the WTO to worsen forecasts regarding the development of the global trade; however, the trade trends demonstrated the adaptability of the world to the new transition realities. In October 2022 the WTO improved its forecast for 2022, but the risks of the war continuation resulted in significant deterioration of the forecast for 2023. The state of affairs leads to growing expectations regarding the reformatting of world trade in the short term while the ongoing war conditions the revision of current approaches to the formation of the world order and further emphasizes the need to transform the world’s leading economic institutions, primarily the World Trade Organization.

The impacts of Russia's invasion of Ukraine on the Kenyan economy: Evidence from an economy‐wide model

AbstractRussia's invasion of Ukraine has disrupted the global supply chains of several globally traded commodities. The repercussions for many African countries are concerning. This study assesses the impact of Russia's invasion of Ukraine on the Kenyan economy using a computable general equilibrium model. The model is calibrated using a highly disaggregated social accounting matrix. The analysis particularly focuses on the impacts of changes in world prices for five major commodities of which Kenya is a net importer. The results show rising import price that adversely lowers Kenya's gross domestic product and household consumption. The macroeconomic impacts are particularly driven by the fertilizer and fuel commodity price changes. Activities producing agrifood commodities and providing services are highly affected. Rural households face a higher food consumer price index than their urban counterparts. Subsidizing fuel and fertilizer prices could dampen most of the adverse effects but would come at considerable fiscal costs. The government of Kenya should consider devising policies that strengthen intraregional trade, diversify import origins and improve agricultural productivity and energy efficiency.

Stock markets from COVID-19 to the Russia–Ukraine crisis: Structural breaks in interactive effects panels

Financial markets are frequently exposed to a variety of crises at the national, regional, and global levels, with potentially heterogeneous effects on market performance. To make sound investment and policy choices, investors and policymakers are constantly concerned about the market's behavior during such times of extreme stress. This article explores the impact of the two recent crises—the Russian–Ukraine war and the COVID-19 pandemic—on equity markets using Karavias et al.’s (2022) panel data approach and daily data from January 2020 to April 2022. Unlike conventional panel data models, this novel technique assesses the presence and location of common structural breaks across the studied countries while accommodating unobserved heterogeneity and panel dependency. We hypothesize that the conflict's impact on global equity markets is heterogeneous and based on countries' economic-political connection or proximity to the war zone, notably among sanctioning countries (the G7) and non-sanctioning countries (the Russia-China-India triple or RIC). Our results suggest that the G7's financial markets are more sensitive to country-specific macroeconomic factors and commodity price changes during extreme market stress than those of the RIC triad. Moreover, the war has a stronger influence on the G7 stock markets through commodity prices, with a greater impact of natural gas and wheat prices for this group. These findings are consistent with the fact that markets in developed economies with an extreme reliance on commodities are more sensitive to crises and international conflicts.

Factors Affecting Economic Crisis in Ethiopia: A Literature Review

The majority aims of this study of the literature reviews are to investigate factors influencing the economic crisis in Ethiopia, which is a developing country in East Africa. Ethiopia has experienced a range of economic difficulties over the last few decades, such as huge rates of inflation, quickly increasing unemployment, dropping currency value, and restricted access to credit. This study looks at both internal and external factors—such as population growth, unstable politics throughout the religions, enough infrastructure and governance, and the amount of outstanding external debt—that affect the nation's economy. Vary academic papers, reports, and articles from institutions, government agencies, and international organizations are examined in this study. This study offers insights and a thorough grasp of the complex factors affecting Ethiopia's economy through the incorporation of prior research on the topic. Findings from this literature review reveal that political instability, characterized by protests, ethnic tensions, and political transitions, greatly hampers the economic development of Ethiopia. This instability reduces investor trust, interferes with corporate operations, and deters foreign direct investment. The economic crisis is made worse by ineffective governance, which is characterized by corruption, inefficient bureaucracy, and inadequate execution. Inadequate infrastructure additionally hinders commerce, investment, and production. Examples of this include restricted access to telecommunication, transportation, and electrical networks. Although a potential resource in terms of human capital, rapid population expansion also presents difficulties, such as rising unemployment rates and dwindling funding for healthcare and education. External causes are a major contributing element to Ethiopia's economic problems as well. The country's main exports, oilseeds, textiles, and coffee, are highly impacted by changes in global commodity prices, which also lead to trade imbalances and unstable revenue streams. Furthermore, the burden of external debt restricts government spending and limits resources for development projects. To overcome these challenges and mitigate the economic crisis, this literature review suggests several policy recommendations. These include improving political stability through transparent governance and inclusive policies, investing in infrastructure development to enhance productivity and competitiveness, and diversifying the economy to reduce reliance on primary commodities.

Climate policy uncertainty and its impact on major grain futures

It is well known that grain futures markets can be affected by climate change, but there is little literature to explore whether this impact owns asymmetry. Therefore, we study this asymmetry on the basis of climate policy uncertainty. We first find that climate may help to understand the changes in grain commodity prices, especially wheat futures. More importantly, climate shows an asymmetric ability to affecting wheat and corn futures. Besides, the effects of climate on different grain futures vary in the long and short runs, but all unidirectional asymmetric relations seem to be significantly lasting.

The Global Factors Driving Common Inflation In ASEAN

Purpose: This study investigates the comovements of inflation across ASEAN countries and identifies the global factors driving the common inflation dynamics of the region. Design/methodology/approach: The study uses a two-step approach. The dynamic latent factor model is first employed to estimate the common inflation of the region in the period between 2000Q1 and 2022Q2. In the second step, a bound test approach to autoregressive distributed lag (ARDL) methodology is employed to estimate the model of common inflation, which is constructed based on the aggregate supply - aggregate demand (AS-AD) framework. Findings: The study finds a common factor of inflation across ASEAN countries. The analysis of variance decomposition indicates the significant role of common inflation in the variations of individual countries' inflation. World economic growth, oil price change, non-fuel commodity price change, and trade openness are the main drivers of ASEAN common inflation in both short and long terms. Research limitations/implications: The study focuses mainly on supply-side factors, although some demand-side factors are involved. Future studies should pay more concerns on the trade linkages among regional countries and the similarities in goals in the region. Originality/value: The study examines the common inflation component across ASEAN countries, which has not been sufficiently investigated. It also evaluates the drivers at the global level of common inflation, which has limited empirical evidence.

Kebijakan Lindung Nilai (Hedging) pada Perusahaan untuk Menjamin Kinerja Perusahaan

Risk fluctuations, including such changes in interest rates, exchange rates, and commodity prices, have a negative impact on business performance and can be mitigated by hedging. Derivative instruments are the preferred method for hedging. Internal hedging calculations take into account size, growth prospects, financial distress, leverage, and liquidity. This study's goal is to examine the variables that influence the hedging decisions of businesses. This study employs a descriptive qualitative methodology. The most influential factors in determining a company's hedging strategy are its size and growth prospects, according to the research. The greatest effect comes from the company's size and growth potential in order to influence the company's hedging policies. Other factors such as leverage, liquidity, financial distress, market depth risk are not so dominant in influencing the company's hedging decisions. However, several variables or factors that are not the dominant factor will be important according to the industry or line of business of each company.Recommendations for further research can be carried out by analyzing the company's external factors that influence hedging decisions.

Post-Keynesian Economics: New Foundations by Marc LavoieChapter 8: Inflation Theory

ABSTRACT The conflicting claims approach to the theory of inflation so thoroughly surveyed and well presented in Chapter 8 of Lavoie's [(2022). Post-Keynesian Economics. New Foundations. Cheltenham, UK: Edward Elgar Publishing] book is deservedly becoming increasingly consensual among heterodox (and even some notable mainstream) macroeconomists. However, the relevance of a concept (and the very existence of) a single NAIRU (Non-Accelerating Inflation Rate of Unemployment) derived consistently from the very premises of the conflicting claims approach is still very controversial. In this review article, we will be to argue that a NAIRU is not really useful for the conflicting claims approach. The key aspects explored here are: (1) the different roles of hysteresis in the output and labor markets; (2) the assumptions concerning real profit markups of firms; and (3) the extent to which money wage increases actually incorporate past (or expected) inflation. We also add some remarks regarding the role of changes in international commodity prices and nominal exchange rates that further illustrate the necessary relation between conflicting claims inflation and the theory of distribution and relative prices.