Title: Commodity Prices and World Economic Recovery*
Abstract: The sharp fall in non-oil commodity prices in 1979-82 went hand-in-hand with the world economic downturn. This chapter examines in the light of post-war experience, a number of specific demand and supply trends which have impinged on commodity prices. Although most forecasters now expect the world economic recovery to continue, it is difficult to see it becoming very rapid, given the official consensus on counter-inflationary policies. At the most general level, the demand for commodities depends upon world economic activity. World industrial production is, in effect, a proxy for the host of specific demand factors affecting particular commodities. Looking at commodity prices in aggregate there is no single factor on the supply side to compare with the general explanatory power of world industrial production on the demand side, since supply factors tend to be more obviously commodity-specific. Aside from the income and trade effects, the major effect of the fall in commodity prices has been to lower world inflation.
Publication Year: 2021
Publication Date: 2021-06-18
Language: en
Type: book-chapter
Indexed In: ['crossref']
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