Price Convergence on World Commodity Markets: Fact or Fiction?

James O. Bukenya and Walter C. Labys
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James O. Bukenya: Department of Agribusiness, Alabama A&M University, Normal, ALjames.bukenya@email.aamu.edu
Walter C. Labys: Regional Research Institute, West Virginia University, Morgantown, WVwlabys@wvu.edu

International Regional Science Review, 2005, vol. 28, issue 3, 302-329

Abstract: This article examines the degree to which commodity prices have converged on world commodity markets over recent decades. Ideally, increases in communications, central bank activities, and globalization would suggest that commodity prices in spatially dispersed markets should become similar over time. To measure convergence, correlation, regression, cointegration, and vector autoregressive methods are employed. Comparable geographic data were assembled for six commodities: coffee, cotton, wheat, lead, copper, and tin, covering the period 1930 through 1998. Overall, the empirical results do not support the convergence hypothesis but rather a pattern of fluctuating divergences.

Keywords: commodity markets; price convergence; spatial price behavior (search for similar items in EconPapers)
Date: 2005
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Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:sae:inrsre:v:28:y:2005:i:3:p:302-329

DOI: 10.1177/0160017604267638

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