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Precious metals and inflation

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  • Nicholas Taylor

Abstract

This paper provides evidence in favour of the hypothesis that precious metals (gold, silver, platinum) act as short-run and long-run hedges against inflation. Using robust estimation techniques, this ability to hedge inflation is concentrated in the period before 1939 and around the second OPEC oil shock in 1979. During no other period could precious metals be used to hedge inflation.

Suggested Citation

  • Nicholas Taylor, 1998. "Precious metals and inflation," Applied Financial Economics, Taylor & Francis Journals, vol. 8(2), pages 201-210.
    • Handle: RePEc:taf:apfiec:v:8:y:1998:i:2:p:201-210
    DOI: 10.1080/096031098333186
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    References listed on IDEAS

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    1. Bodie, Zvi, 1976. "Common Stocks as a Hedge against Inflation," Journal of Finance, American Finance Association, vol. 31(2), pages 459-470, May.
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    3. Johnson, Glenn L. & Reilly, Frank K. & Smith, Ralph E., 1971. "Individual Common Stocks as Inflation Hedges," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 6(3), pages 1015-1024, June.
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    5. Engle, Robert & Granger, Clive, 2015. "Co-integration and error correction: Representation, estimation, and testing," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 39(3), pages 106-135.
    6. Branch, Ben, 1974. "Common Stock Performance and Inflation: An International Comparison," The Journal of Business, University of Chicago Press, vol. 47(1), pages 48-52, January.
    7. Phillips, P C B, 1987. "Time Series Regression with a Unit Root," Econometrica, Econometric Society, vol. 55(2), pages 277-301, March.
    8. Johansen, Soren, 1988. "Statistical analysis of cointegration vectors," Journal of Economic Dynamics and Control, Elsevier, vol. 12(2-3), pages 231-254.
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