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Have Commodity Markets Political Nature?

In: Advances in Econometrics, Operational Research, Data Science and Actuarial Studies

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  • Avni Önder Hanedar

    (Sakarya University)

Abstract

This chapter examines whether good markets have political aspects, based on unique data for daily prices in İstanbul between 1918 and 1924. To set a convincing causal estimate for the impacts of political uncertainty on good prices, we focus on political risk changes during this historical episode that was not related to confounding factors, such as economic depression. Our findings shed light on the presence of higher political risk due to the resignations of governments, leading to good price fluctuations through sudden changes in supply and trade disruptions. Based on a natural experiment relating to the end of the Ottoman Empire, our results fill the gap in the literature, which covers limited research on the positive link between political events and fluctuations in commodity market prices.

Suggested Citation

  • Avni Önder Hanedar, 2022. "Have Commodity Markets Political Nature?," Contributions to Economics, in: M. Kenan Terzioğlu (ed.), Advances in Econometrics, Operational Research, Data Science and Actuarial Studies, pages 171-187, Springer.
    • Handle: RePEc:spr:conchp:978-3-030-85254-2_10
    DOI: 10.1007/978-3-030-85254-2_10
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    References listed on IDEAS

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    1. Jens, Candace E., 2017. "Political uncertainty and investment: Causal evidence from U.S. gubernatorial elections," Journal of Financial Economics, Elsevier, vol. 124(3), pages 563-579.
    2. Avni Önder Hanedar, 2016. "Effects of wars and boycotts on international trade: Evidence from the late Ottoman Empire," The International Trade Journal, Taylor & Francis Journals, vol. 30(1), pages 59-79, January.
    3. Richard Hornbeck & Suresh Naidu, 2014. "When the Levee Breaks: Black Migration and Economic Development in the American South," American Economic Review, American Economic Association, vol. 104(3), pages 963-990, March.
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