Commodity Price Dynamics and Anticipated Shocks

Shih Wen Hu and Vey Wang

American Journal of Agricultural Economics, 1996, vol. 78, issue 4, 982-990

Abstract: In this paper we address the robustness of overshooting hypothesis in agricultural prices. We find that agricultural prices may undershoot their long-run level if the economy experiences an anticipated monetary shock rather than an unanticipated monetary shock. We also find that agricultural prices definitely display undershooting if the price of manufactures adjusts instantaneously rather than sluggishly. Copyright 1996, Oxford University Press.

Date: 1996
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