Recent Inflationary Trends in World Commodities Markets

WPIEA2008130 Image
Price:  $18.00

Author/Editor: Noureddine Krichene
Release Date: © May, 2008
ISBN : 978-1-45186-989-7
Stock #: WPIEA2008130
English
Stock Status: Available

Languages and formats available

EnglishFrenchSpanishArabicRussianChinesePortuguese
PaperbackYes
PDFYes

Description

Expansionary monetary policies in key industrial countries and sharply depreciating U.S. dollar exchange rate sent commodities prices soaring at unprecedented rates during 2003-2007. Food prices rose to alarming levels threatening malnutrition and food riots. In contrast, consumer price indices, a leading indicator for monetary policy, were showing almost no inflation and posed a price puzzle insofar their evolution was not responsive to record low interest rates, double digit commodities inflation, and sharp exchange rate depreciation. Commodities prices were shown to be driven by one common trend, identified as a monetary shock. Policy makers may have to face a policy dilemma: maintain monetary policy stance with accelerating commodities price inflation, subsequent world recession, and financial disorder; or tighten monetary policy with subsequent world recession followed by recovery and financial and price stability.

Taxonomy

Economic policy , Inflation , Monetary policy




More publications in this series: Working Papers


More publications by: Noureddine Krichene