El Nino and World Primary Commodity Prices: Warm Water or Hot Air?

Author/Editor:

Allan D. Brunner

Publication Date:

December 1, 2000

Electronic Access:

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Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

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.

Series:

Working Paper No. 2000/203

Subject:

Agricultural commodities Commodities Commodity prices Consumer prices Inflation Prices

English

Publication Date:

December 1, 2000

ISBN/ISSN:

9781451874440/1018-5941

Stock No:

WPIEA2032000

Pages:

34

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