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Will the Emergence of the Euro Affect World Commodity Prices?

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  • Ms. Hong Liang
  • Mr. John T. Cuddington

Abstract

This study provides evidence that episodes of internal stability of exchange rates among the 11 Euro countries during 1957-98 were associated with periods of lower real commodity price volatility. These stabilizing effects are statistically significant for fertilizer, metals, petroleum, and cereals. A reasonable inference, therefore, is that the establishment of the Euro on January 1, 1999, should be expected to contribute to reduced volatility of world commodity prices, other things equal, although the impacts are likely to be modest.

Suggested Citation

  • Ms. Hong Liang & Mr. John T. Cuddington, 2000. "Will the Emergence of the Euro Affect World Commodity Prices?," IMF Working Papers 2000/208, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2000/208
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    3. René Lalonde & Zhenhua Zhu & Frédérick Demers, 2003. "Forecasting and Analyzing World Commodity Prices," Money Affairs, CEMLA, vol. 0(1), pages 1-30, January-J.

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    More about this item

    Keywords

    WP; commodity price; SDR exchange rate; U.S. dollar; volatility measure; Commodity prices; volatility; exchange rate regimes; Euro; commodity index; volatility variable; commodity volatility measure; SDR rate; exchange rate volatility; SDR volatility; commodity flow; commodity volatility variable; price series; price data; Exchange rates; Commodity price fluctuations; Agricultural commodities; Global;
    All these keywords.

    JEL classification:

    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics

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