Monetary policy effects on freight rates of dry bulk vessels

Eleftheria Kostika, Panagiota Siameti and George Dotsis

International Economics, 2025, vol. 182, issue C

Abstract: This paper examines how monetary policy shocks affect freight rates by applying a VAR model using data for the period 2003–2022. The empirical analysis reveals a significant impact of monetary policy on freight rates of dry bulk vessels. After a contractionary monetary policy shock, freight rates as measured by the Baltic Dry Index (BDI) display a sharp decrease and subsequently start to increase until they reach a peak after almost two and a half years. Concerning individual cargo types, we show that vessels of largest capacity suffer a sharper decrease than the other vessel types in the short run, whereas the persistency of the increase towards the peak point is consistent across all cargo types.

Keywords: Monetary policy shock; Freight rates; VAR; Dry bulk vessels (search for similar items in EconPapers)
JEL-codes: E52 E58 R40 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:inteco:v:182:y:2025:i:c:s2110701725000198

DOI: 10.1016/j.inteco.2025.100596

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