What drives commodity price booms and busts?

David Jacks and Martin Stuermer

No 1614, Working Papers from Federal Reserve Bank of Dallas

Abstract: What drives commodity price booms and busts? We provide evidence on the dynamic effects of commodity demand shocks, commodity supply shocks, and inventory demand shocks on real commodity prices. In particular, we analyze a new data set of price and production levels for 12 agricultural, metal, and soft commodities from 1870 to 2013. We identify differences in the type of shock driving prices of the various types of commodities and relate these differences to commodity types which reflect differences in long-run elasticities of supply and demand. Our results show that demand shocks strongly dominate supply shocks.

Keywords: Commodity prices; natural resources; structural VAR (search for similar items in EconPapers)
JEL-codes: E30 N50 Q31 Q33 (search for similar items in EconPapers)
Pages: 29 pages
Date: 2016-11-01
New Economics Papers: this item is included in nep-agr and nep-mac
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Citations: View citations in EconPapers (8)

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Journal Article: What drives commodity price booms and busts? (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:fip:feddwp:1614

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DOI: 10.24149/wp1614

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