Will the Emergence of the Euro Affect World Commodity Prices?
IMF Working Papers, December 1, 2000
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- Will the Emergence of the Euro Affect World Commodity Prices?
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Bibliographic details
- Authors: Hong Liang, John T. Cuddington
- Published: December 1, 2000
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451874693.001
Summary
- The study provides evidence that episodes of internal stability of exchange rates among the 11 Euro countries during 1957-98 were associated with periods of lower real commodity price volatility.
- The stabilizing effects are statistically significant for fertilizer, metals, petroleum, and cereals.
- A reasonable inference is that the establishment of the Euro on January 1, 1999, should be expected to contribute to reduced volatility of world commodity prices, other things equal, although the impacts are likely to be modest.
Key Findings
- Episodes of internal exchange rate stability among the 11 Euro countries (1957-98) correlate with lower real commodity price volatility.
- Statistically significant stabilizing effects were found for:
- fertilizer
- metals
- petroleum
- cereals
- The anticipated effect of the Euro (established January 1, 1999) is a contribution to reduced volatility of world commodity prices, with expected impacts characterized as modest.
Subject Matter and Keywords
- Subject: Agricultural commodities, Commodities, Commodity price fluctuations, Commodity prices, Exchange rates, Foreign exchange, Prices
- Keywords: Agricultural commodities, commodity flow, commodity index, commodity price, Commodity price fluctuations, Commodity prices, commodity volatility measure, commodity volatility variable, Euro, exchange rate regimes, exchange rate volatility, Exchange rates, Global, price data, price series, SDR exchange rate, SDR rate, SDR volatility, U.S. dollar, volatility, volatility measure, volatility variable, WP
Content in this bundle
- Will the Emergence of the Euro Affect World Commodity Prices? - WP/00/208