Commodity prices, money and inflation

Frank Browne and David Cronin

Journal of Economics and Business, 2010, vol. 62, issue 4, 345 pages

Abstract: We argue that long run and dynamic relationships should exist between commodity prices, consumer prices and money. Using a cointegrating VAR framework and US data, our empirical analysis shows equilibrium relationships existing between money, commodity prices and consumer prices, with both commodity and consumer prices proportional to the money supply in the long run. Persistence profiles reveal commodity prices initially overshooting their new equilibrium values in response to a money supply shock. We conclude that money has to be brought into analyses of the relationship between commodity prices and consumer prices.

Keywords: Monetary; policy; Commodity; prices; Overshooting (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (53)

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Related works:
Working Paper: Commodity prices, money and inflation (2007)
Working Paper: Commodity Prices, Money and Inflation (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jebusi:v:62:y::i:4:p:331-345

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