Have Commodity Markets Political Nature?

Avni Hanedar

A chapter in Advances in Econometrics, Operational Research, Data Science and Actuarial Studies, 2022, pp 171-187 from Springer

Abstract: Abstract This chapter examines whether good markets have political aspects, based on unique data for daily prices in İstanbul between 1918 and 1924. To set a convincing causal estimate for the impacts of political uncertainty on good prices, we focus on political risk changes during this historical episode that was not related to confounding factors, such as economic depression. Our findings shed light on the presence of higher political risk due to the resignations of governments, leading to good price fluctuations through sudden changes in supply and trade disruptions. Based on a natural experiment relating to the end of the Ottoman Empire, our results fill the gap in the literature, which covers limited research on the positive link between political events and fluctuations in commodity market prices.

Keywords: Good markets; Commodity prices; Political uncertainty; Natural experiment; Counterfactual analysis; Risk (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:spr:conchp:978-3-030-85254-2_10

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DOI: 10.1007/978-3-030-85254-2_10

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