Will the Emergence of the Euro Affect World Commodity Prices?
32 Pages Posted: 14 Feb 2006
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Will the Emergence of the Euro Affect World Commodity Prices?
Will the Emergence of the Euro Affect World Commodity Prices?
Date Written: December 2000
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.
Keywords: Commodity prices, volatility, exchange rate regimes, Euro
JEL Classification: F33, O13, F41
Suggested Citation: Suggested Citation
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