On the Evolving Relationship between Corn and Oil Prices
Eskandar Elmarzougui () and
Cahiers de recherche CREATE from CREATE
The relationship between corn and oil prices is not a stable one. We identified three breaks in the relationship between corn and oil prices. The first break coincides with the second oil crisis. The second break marks the end of the agricultural export subsidy war between the EU and the US in the mid 1980s while the third one occurred at the beginning of the ethanol boom at the very end of the 1990s. The relationship between corn and oil prices tends to be stronger when oil prices are highly volatile and when agricultural policies create less distortion. The ethanol boom strengthened the relation between corn and oil prices which are (were not) cointegrated in the fourth regime (first three) regime(s). Impulse response functions confirm that corn prices systematically respond to oil price shocks, but the converse is not observed.
Keywords: Oil corn; structural changes; cointegration; ethanol; protectionism (search for similar items in EconPapers)
JEL-codes: C32 Q11 Q17 Q40 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-agr, nep-cwa and nep-ene
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2) Track citations by RSS feed
Downloads: (external link)
https://www.create.ulaval.ca/sites/create.ulaval.c ... ons/create2011-3.pdf (application/pdf)
Journal Article: On the Evolving Relationship Between Corn and Oil Prices (2013)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:lvl:creacr:2011-3
Access Statistics for this paper
More papers in Cahiers de recherche CREATE from CREATE Contact information at EDIRC.
Bibliographic data for series maintained by Manuel Paradis ().