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El Nino and World Primary Commodity Prices: Warm Water or Hot Air?
Author: Mr. Allan D. Brunner
Series:
IMF Working Papers
Volume/Issue:
Volume 2000: Issue 203
Language:
English
Publication Date:
01 Dec 2000
DOI:
https://doi.org/10.5089/9781451874440.001
ISBN:
9781451874440
ISSN:
1018-5941
Pages:
34
Keywords:
WP; El Nino southern oscillation; price; ENSO event; commodity; ENSO; El Niño; primary commodity prices; ENSO intensity; ENSO measure; ENSO shock; inflation movement; ENSO cycle; Commodity prices; Inflation; Consumer prices; Agricultural commodities; South America
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IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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This paper examines the historical effects of the El Niño-Southern Oscillation (ENSO) cycle on world prices and economic activity. The analysis indicates that ENSO has economically-important and statistically-significant effects on world real commodity prices. A one-standard-deviation positive surprise in ENSO, for example, raises real commodity price inflation about 3-1/2 to 4 percentage points. Moreover, ENSO appears to account for almost 20 percent of commodity price inflation movements over the past several years. ENSO also has some explanatory power for world consumer price inflation and world economic activity, accounting for about 10 to 20 percent of movements in those variables.
Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund