scholarly journals International Food Commodity Prices and Missing (Dis)Inflation in the Euro Area

2020 ◽  
pp. 1-43
Author(s):  
Gert Peersman
Keyword(s):  
Euro Area ◽  
Commodity Prices ◽  
Medium Term ◽  
Price Shocks ◽  
Production Chain ◽  
Inflation Volatility ◽  
The Great Recession ◽  
Svar Model ◽  
Retail Prices ◽  
Food Commodity

Exogenous shifts in international food commodity prices, which are identified using an SVAR model with global harvest shocks as an external instrument, explain almost 30 percent of euro area inflation volatility over the medium term and contributed significantly to the twin puzzle of missing (dis) inflation in the era after the Great Recession. International food price shocks have an impact on food retail prices through the food production chain, but also trigger indirect inflationary effects via a depreciation of the euro and, most importantly, rising wages. Finally, due to asymmetric wage responses, the inflationary effects are very different across member states.

The UK and EMU: Choosing the Regime

2002 ◽  
Vol 180 ◽  
pp. 54-71 ◽  
Author(s):  
Ray Barrell
Keyword(s):  
Euro Area ◽  
Policy Framework ◽  
Medium Term ◽  
Fiscal Regimes ◽  
The Stability ◽  
The Uk

The UK has to make a decision on membership of EMU in the next two years. The monetary and fiscal regimes in the Euro Area and in the UK do not differ greatly. However, we argue that membership of EMU will increase the stability of the economy and the credibility of the policy framework, and hence will enhance the prospects for growth and higher incomes and employment. There appear to be no major problems associated with joining EMU at around 1.50 euros to the pound, although there are risks to the UK if the euro appreciates against the dollar after we have entered. However, the costs associated with this risk have to be offset against the probability of the significant output gains that could come from EMU membership in the medium term.

scholarly journals Breaks, trends and unit roots in commodity prices: a robust investigation

2014 ◽  
Vol 18 (1) ◽  
Author(s):  
Atanu Ghoshray ◽  
Mohitosh Kejriwal ◽  
Mark Wohar
Keyword(s):  
Unit Root ◽  
Structural Breaks ◽  
Commodity Prices ◽  
Unit Roots ◽  
Commodity Price ◽  
Policy Implications ◽  
Price Shocks ◽  
Price Series ◽  
Commodity Price Shocks ◽  
Trend Breaks

AbstractThis paper empirically examines the time series behavior of primary commodity prices relative to manufactures with reference to the nature of their underlying trends and the persistence of shocks driving the price processes. The direction and magnitude of the trends are assessed employing a set of econometric techniques that is robust to the nature of persistence in the commodity price shocks, thereby obviating the need for unit root pretesting. Specifically, the methods allow consistent estimation of the number and location of structural breaks in the trend function as well as facilitate the distinction between trend breaks and pure level shifts. Further, a new set of powerful unit root tests is applied to determine whether the underlying commodity price series can be characterized as difference or trend stationary processes. These tests treat breaks under the unit root null and the trend stationary alternative in a symmetric fashion thereby alleviating the procedures from spurious rejection problems and low power issues that plague most existing procedures. Relative to the extant literature, we find more evidence in favor of trend stationarity suggesting that real commodity price shocks are primarily of a transitory nature. We conclude with a discussion of the policy implications of our results.

Oil price forecasting using probabilistic projection of the United States dollar

2011 ◽  
Vol 51 (1) ◽  
pp. 411
Author(s):  
Noll Moriarty
Keyword(s):  
United States ◽  
Commodity Prices ◽  
The United States ◽  
Oil Price ◽  
Petroleum Exploration ◽  
Capital Expenditures ◽  
Medium Term ◽  
United States Dollar ◽  
Probabilistic Forecasts ◽  
Probabilistic Projection

Accurate forecasts for medium-term commodity prices are essential for resource companies committing to large capital expenditures. The inaccuracy of conventional forecasting methods is well known because they tend to be extrapolations of the current price trend. The inevitable reversal catches many by surprise. This paper demonstrates that medium-term (2–5 years) commodity prices are not strongly linked to economic health and commodity demand-supply, but are instead inversely controlled by supply-demand for the United States dollar (USD) and consequent valuation. P90, P50 and P10 projection bounds for future valuation of the USD are presented based on the successful probabilistic techniques of the petroleum exploration industry. This allows probabilistic projections for the oil price, which is inversely related to the USD valuation. I show that the USD is significantly undervalued at present. Probabilistic projection of the USD valuation indicates that likely appreciation will put downward pressure on commodity prices for the next 2–5 years. If the USD premise is correct, likely appreciation of the dollar during the next 2–5 years will hold stable, or even decrease, oil price to around USD $50 BBL. This is a contrary expectation to most forecasts—one which, if it eventuates, should give cause for reflection before committing to large capital expenditures. Further investigation could examine the extent to which the USD valuation can be modelled as a fractal phenomenon. If so, it would mean the USD valuation is not driven by conventional economic fundamentals; instead, it is a semi-random number series with serial correlation. If true, probabilistic forecasts of the USD can be significantly improved, hence that of medium-term commodity prices.

scholarly journals Household heterogeneity in the euro area since the onset of the Great Recession

2016 ◽  
Vol 38 (1) ◽  
pp. 181-197 ◽  
Author(s):  
Miguel Ampudia ◽  
Akmaral Pavlickova ◽  
Jiri Slacalek ◽  
Edgar Vogel
Keyword(s):  
Euro Area ◽  
Great Recession ◽  
The Great Recession ◽  
Household Heterogeneity
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