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China's Impacton World Commodity Markets

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  • Mr. Shaun K. Roache

Abstract

Shocks to aggregate activity in China have a significant and persistent short-run impact on the price of oil and some base metals. In contrast, shocks to apparent commodity-specific consumption (in part reflecting inventory demand) have no effect on commodity prices. China’s impact on world commodity markets is rising but, perhaps surprisingly, remains smaller than that of the United States. This is mainly due to the dynamics of real activity growth shocks in the U.S, which tend to be more persistent and have larger effects on the rest of the world.

Suggested Citation

  • Mr. Shaun K. Roache, 2012. "China's Impacton World Commodity Markets," IMF Working Papers 2012/115, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2012/115
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    References listed on IDEAS

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    1. William G. Tomek & Robert J. Myers, 1993. "Empirical Analysis of Agricultural Commodity Prices: A Viewpoint," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 15(1), pages 181-202.
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    5. Mr. Yongzhen Yu, 2011. "Identifying the Linkages between Major Mining Commodity Prices and China’s Economic Growth—Implications for Latin America," IMF Working Papers 2011/086, International Monetary Fund.
    6. Gilbert, Christopher L., 1990. "The rational expectations hypothesis in models of primary commodity prices," Policy Research Working Paper Series 384, The World Bank.
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