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Booms and slumps in world commodity prices

  • Cashin, Paul
  • McDermott, C. John
  • Scott, Alasdair

This paper examines the duration and magnitude of cycles in commodity prices. We find that for the majority of commodities, price slumps last longer than price booms. How far prices fall in a slump is found to be slightly larger than how far they tend to rebound in a subsequent boom. We also find little evidence of a consistent `shape' to cycles in commodity prices. For all commodities, the probability of an end to a slump in prices is independent of the time already spent in the slump, and for most commodities, the probability of an end to a boom in prices is independent of the time already spent in the boom.

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Article provided by Elsevier in its journal Journal of Development Economics.

Volume (Year): 69 (2002)
Issue (Month): 1 (October)
Pages: 277-296

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Handle: RePEc:eee:deveco:v:69:y:2002:i:1:p:277-296
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  1. Deaton, Angus & Laroque, Guy, 1992. "On the Behaviour of Commodity Prices," Review of Economic Studies, Wiley Blackwell, vol. 59(1), pages 1-23, January.
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