The level of global economic activity is becoming more important in determining fluctuations in commodity prices, a working paper published by the Banque de France argues.
In Common factors of commodity prices, Simona Delle Chiaie, Laurent Ferrara and Domenico Giannone use International Monetary Fund data on the prices of 52 commodities from 1980 to 2015. The authors find that “the bulk of the fluctuations in commodity prices is well summarised by a single global factor”.
This factor is “close
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