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Monetary policy effects on freight rates of dry bulk vessels

Author

Listed:
  • Kostika, Eleftheria
  • Siameti, Panagiota
  • Dotsis, George

Abstract

This paper examines how monetary policy shocks affect freight rates by applying a VAR model using data for the period 2003–2022. The empirical analysis reveals a significant impact of monetary policy on freight rates of dry bulk vessels. After a contractionary monetary policy shock, freight rates as measured by the Baltic Dry Index (BDI) display a sharp decrease and subsequently start to increase until they reach a peak after almost two and a half years. Concerning individual cargo types, we show that vessels of largest capacity suffer a sharper decrease than the other vessel types in the short run, whereas the persistency of the increase towards the peak point is consistent across all cargo types.

Suggested Citation

  • Kostika, Eleftheria & Siameti, Panagiota & Dotsis, George, 2025. "Monetary policy effects on freight rates of dry bulk vessels," International Economics, Elsevier, vol. 182(C).
    • Handle: RePEc:eee:inteco:v:182:y:2025:i:c:s2110701725000198
    DOI: 10.1016/j.inteco.2025.100596
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    More about this item

    Keywords

    Monetary policy shock; Freight rates; VAR; Dry bulk vessels;
    All these keywords.

    JEL classification:

    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • R40 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - General

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