The Relative Volatility of Commodity Prices : A Reappraisal
This paper studies the volatility of commodity prices on the basis of a large dataset of monthly prices observed in international trade data from the United States over the period 2002 to 2011. The conventional wisdom in academia and policy circles...
| Main Authors: | , , |
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| Language: | English |
| Published: |
2012
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| Subjects: | |
| Online Access: | http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20111208154920 http://hdl.handle.net/10986/3673 |
| Summary: | This paper studies the volatility of
commodity prices on the basis of a large dataset of monthly
prices observed in international trade data from the United
States over the period 2002 to 2011. The conventional wisdom
in academia and policy circles is that primary commodity
prices are more volatile than those of manufactured
products, although most of the existing evidence does not
actually attempt to measure the volatility of prices of
individual goods or commodities. The literature tends to
focus on trends in the evolution and volatility of ratios of
price indexes composed of multiple commodities and products.
This approach can be misleading. Indeed, the evidence
presented in this paper suggests that on average prices of
individual primary commodities are less volatile than those
of individual manufactured goods. However, the challenges of
managing terms of trade volatility in developing countries
with concentrated export baskets remain. |
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