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The Impact Of The Recent Federal Reserve Large-Scale Asset Purchases On The Agricultural Commodity Prices: A Historical Decomposition

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  • Saghaian, Sayed H.
  • Reed, Michael R.
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    Abstract

    In this study, we evaluate the effects of the recent Federal Reserve’s purchases of long-term assets on prices of agricultural commodities. The first large-scale asset purchases began at the end of 2008, after the Great Recession, and the second purchases began in November of 2010. The commodities included in this analysis are meats (beef, pork, and broilers), cereal grains (corn, soybeans, wheat, and rice), and softs (sugar, coffee, cocoa, and cotton). Using historical decompositions, we find significant increases in the nominal agricultural prices of ten out of 12 agricultural commodities under investigation from the second large-scale asset

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    Bibliographic Info

    Article provided by Niğde University, Faculty of Economics and Administrative Sciences in its journal International Journal of Food and Agricultural Economics (IJFAEC).

    Volume (Year): 2 (2)
    Issue (Month): 2 ()
    Pages:

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    Handle: RePEc:ags:ijfaec:168574

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    Related research

    Keywords: Agricultural commodities; quantitative easing; monetary policy; great recession; historical decomposition; Agricultural and Food Policy; Food Consumption/Nutrition/Food Safety;

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    1. Lawrence J. Christiano & Martin Eichenbaum & Charles Evans, 1994. "The effects of monetary policy shocks: evidence from the Flow of Funds," Working Paper Series, Macroeconomic Issues 94-2, Federal Reserve Bank of Chicago.
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    4. Sayed H. Saghaian & Michael R. Reed & Mary A. Marchant, 2002. "Monetary Impacts and Overshooting of Agricultural Prices in an Open Economy," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 84(1), pages 90-103.
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    8. Annette Vissing-Jorgensen & Arvind Krishnamurthy, 2011. "The Effects of Quantitative Easing on Long-term Interest Rates," 2011 Meeting Papers 1447, Society for Economic Dynamics.
    9. Bordo, Michael David, 1980. "The Effects of Monetary Change on Relative Commodity Prices and the Role of Long-Term Contracts," Journal of Political Economy, University of Chicago Press, vol. 88(6), pages 1088-1109, December.
    10. Stefania D'Amico & Thomas B. King, 2010. "Flow and stock effects of large-scale Treasury purchases," Finance and Economics Discussion Series 2010-52, Board of Governors of the Federal Reserve System (U.S.).
    11. Arvind Krishnamurthy & Annette Vissing-Jorgensen, 2011. "The Effects of Quantitative Easing on Interest Rates: Channels and Implications for Policy," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 43(2 (Fall)), pages 215-287.
    12. James S. Fackler & W. Douglas McMillin, 2002. "Evaluating Monetary Policy Options," Southern Economic Journal, Southern Economic Association, vol. 68(4), pages 794-810, April.
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