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Commodity prices and international Inflation, 1851–1913

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  • Gerlach, Stefan
  • Stuart, Rebecca

Abstract

This paper uses annual data to study the impact of commodity prices on consumer prices in 15 economies from 1851 to 1913. We calculate a simple measure of the common component of commodity prices which co-moves with the international business cycle and Granger causes consumer price inflation. Commodity prices are significant in standard inflation equations estimated by OLS in 14 of 15 economies. Estimating these equations using real shipping costs as an instrument suggests that commodity price movements associated with shifts in demand arising from international business cycles have a particularly large impact on inflation.

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  • Gerlach, Stefan & Stuart, Rebecca, 2024. "Commodity prices and international Inflation, 1851–1913," Journal of International Money and Finance, Elsevier, vol. 144(C).
    • Handle: RePEc:eee:jimfin:v:144:y:2024:i:c:s0261560624000846
    DOI: 10.1016/j.jimonfin.2024.103097
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    More about this item

    Keywords

    Commodity prices; Gold standard; International inflation; Business cycle;
    All these keywords.

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • F40 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - General
    • N10 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - General, International, or Comparative

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