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China's Impacton World Commodity Markets

Shaun Roache

No 2012/115, IMF Working Papers from International Monetary Fund

Abstract: Shocks to aggregate activity in China have a significant and persistent short-run impact on the price of oil and some base metals. In contrast, shocks to apparent commodity-specific consumption (in part reflecting inventory demand) have no effect on commodity prices. China’s impact on world commodity markets is rising but, perhaps surprisingly, remains smaller than that of the United States. This is mainly due to the dynamics of real activity growth shocks in the U.S, which tend to be more persistent and have larger effects on the rest of the world.

Keywords: WP; center; commodity; commodity price; Commodity Prices; Oil Price; Spillovers; Business Cycle Fluctuations; impulse Reponses; commodity market; impact estimate; price shock; commodity consumption; China effect; commodity group; price variance; commodity inventory; commodity price variance; commodity price movement; demand variable; Consumption; Industrial production; Commodity markets; Global (search for similar items in EconPapers)
Pages: 24
Date: 2012-05-01
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Citations: View citations in EconPapers (29)

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Handle: RePEc:imf:imfwpa:2012/115