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Interest Rates and Commodity Prices

Author

Listed:
  • Kitchen, John
  • Rausser, Gordon C.

Abstract

The theory of storage and arbitrage approaches fully incorporate nominal interest rates in far-near commodity price spreads Alternative frameworks admit a relationship between interest rates and commodity own rates of interest and as a result the commodity price spread would not completely incorporate the nominal interest rate This study examines the Views on interest rate-commodlty price relationships, the potential role of nonneutralities, and empirical evidence on the relationships The evidence does not support the hypothesis of a close relationship between commodity own rates and the real interest rate

Suggested Citation

  • Kitchen, John & Rausser, Gordon C., 1989. "Interest Rates and Commodity Prices," Journal of Agricultural Economics Research, United States Department of Agriculture, Economic Research Service, vol. 41(2), pages 1-7.
    • Handle: RePEc:ags:uersja:138240
    DOI: 10.22004/ag.econ.138240
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    References listed on IDEAS

    as
    1. Fama, Eugene F., 1984. "Forward and spot exchange rates," Journal of Monetary Economics, Elsevier, vol. 14(3), pages 319-338, November.
    2. Dusak, Katherine, 1973. "Futures Trading and Investor Returns: An Investigation of Commodity Market Risk Premiums," Journal of Political Economy, University of Chicago Press, vol. 81(6), pages 1387-1406, Nov.-Dec..
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Buccola, Steven T., 1989. "Pricing Efficiency In Agricultural Markets: Issues, Methods, And Results," Western Journal of Agricultural Economics, Western Agricultural Economics Association, vol. 14(1), pages 1-11, July.
    2. Monaco, Ralph M., 1991. "Recent Macroeconomic Developments And Their Impact On Agriculture," Northeastern Journal of Agricultural and Resource Economics, Northeastern Agricultural and Resource Economics Association, vol. 20(2), pages 1-7, October.
    3. Kitchen, John & LeBlanc, Michael & Conway, Roger, 1989. "Commodity Prices in Monetary Policy: The Potential Role of Agricultural Commodity Prices," 1989 Annual Meeting, July 30-August 2, Baton Rouge, Louisiana 270491, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    4. Franken, Jason R.V. & Garcia, Philip & Irwin, Scott H., 2006. "Do Interest Rates Explain Disaggregate Commodity Price Growth?," 2006 Annual meeting, July 23-26, Long Beach, CA 21319, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).

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