Are commodity prices a leading indicator of inflationary trends?
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Are commodity prices a leading indicator of inflationary trends?

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Published by typescript in [s.l.] .
Written in English


Book details:

Edition Notes

Dissertation (M.A.) - University of Warwick, 1988.

Statementby Nikos Economou.
ID Numbers
Open LibraryOL13938761M

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The usefulness of commodity prices as a leading indicator of general price inflation is questionable because they are dependent upon the type of demand shift that occurs, for example, economy-wide demand shocks (i.e. oil shock of the s)or shifts in the relative demand for commodities and goods. Primary commodity prices are variable (section II), and in part this variability is the result of macroeconomic fluctuations in the industrial ized countries. Rises in commodity prices will, to a greater or lesser extent, feed through into inflation. The standard route by which activity is seen as affecting inflation is through the labour. “leading indicators” of inflation. The leading indi-cators typically incorporate in formation on selected prices to augment or replace information on eco-nomic slack. The prices selected are usually key commodity prices that fluctuate more or less con-tinuously in response to changing economic condi-tions. Prominent leading indicators of.   Commodity prices are believed to be a leading indicator of inflation. But, that may not alway ring true. Globalization contributes to changes in trends.

  Expansionary monetary policies in key industrial countries and sharply depreciating U.S. dollar exchange rate sent commodities prices soaring at unprecedented rates during Food prices rose to alarming levels threatening malnutrition and food riots. In contrast, consumer price indices, a leading indicator for monetary policy, were showing almost no inflation and posed a price . Recent Inflationary Trends in World Commodities Markets consumer price indices (CPIs) in many industrial countries, a leading indicator for the conduct of monetary policy, were not sensitive to high increases in commodities or housing prices. In spite of fast rise in housing, energy, and food prices, commodities price inflationary. constituent series, including a commodity price measure, the growth rate of total debt, and the ratio of employment to population. Roth found that the Moore index anticipated turning points in CPI inflation “quite well.” All of the leading indicator indexes mentioned above share an important. Commodity prices. Commodity prices are considered good macroeconomic indicators because their market prices often change before other lagging indicators. An economy-wide increase in demand for a commodities, such as wood, iron and oil, can be seen as a sign that an economy is growing.

  The results for the three commodity indices are shown in turn in rows (a)–(c) of Table chosen VAR lag length is six. We estimate with no intercepts and no trends in the cointegrating vectors. 7 With these choices made, the first step is to test for cointegration among the four variables (CPI, M2, GDP and each alternative commodity price index) using the Johansen () trace statistic. Downloadable! Expansionary monetary policies in key industrial countries and sharply depreciating U.S. dollar exchange rate sent commodities prices soaring at unprecedented rates during Food prices rose to alarming levels threatening malnutrition and food riots. In contrast, consumer price indices, a leading indicator for monetary policy, were showing almost no inflation and posed a. This column developed out of a running debate I've had with the editors of the Wall Street Journal and the New York Times. In the financial news, the Times highlights the price of oil as the best indicator of commodity prices and inflationary expectations. The front page of the Wall Street Journal publishes nine prices and indices, including oil and the Dow Jones Commodity Spot Index, to. November 3, — Commodity prices rose in October, with energy commodities rising % and non-energy commodities rising %. Food commodities rose sharply, led by oils and meals (%) and grains (%). Precious metals fell % while base metals rose %. Read More».