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Market Power and Primary Commodity Prices: The Case of Copper


  • Rodrigo Cerda

    () (Instituto de Economía. Pontificia Universidad Católica de Chile.)


This paper identifies the economic fundamentals of the evolution of copper price. The main hypotheses of the paper is that cooper price is mainly determined by the evolution of demand of countries with large market power on that market. The novelty is that nominal exchange rate are one of the fundamental of market power. We use monthly data ranging from 1994 to 2003 and by means of a cointegration analysis; we find the Asian block significantly affects the price of this tradable good.

Suggested Citation

  • Rodrigo Cerda, 2005. "Market Power and Primary Commodity Prices: The Case of Copper," Documentos de Trabajo 282, Instituto de Economia. Pontificia Universidad Católica de Chile..
  • Handle: RePEc:ioe:doctra:282

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    1. du Toit, Charlotte & Moolman, Elna, 2004. "A neoclassical investment function of the South African economy," Economic Modelling, Elsevier, vol. 21(4), pages 647-660, July.
    2. Tobin, James, 1969. "A General Equilibrium Approach to Monetary Theory," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 1(1), pages 15-29, February.
    3. R. Vergara, 2010. "Taxation and private investment: evidence for Chile," Applied Economics, Taylor & Francis Journals, vol. 42(6), pages 717-725.
    4. Bustos, Alvaro & Engel, Eduardo M. R. A. & Galetovic, Alexander, 2004. "Could higher taxes increase the long-run demand for capital? Theory and evidence for Chile," Journal of Development Economics, Elsevier, vol. 73(2), pages 675-697, April.
    5. R. Glenn Hubbard & Anil K. Kashyap & Toni M. Whited, 1993. "Internal Finance and Firm Investment," NBER Working Papers 4392, National Bureau of Economic Research, Inc.
    6. Jason G. Cummins & Kevin A. Hassett & R. Glenn Hubbard, 1994. "A Reconsideration of Investment Behavior Using Tax Reforms as Natural Experiments," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 25(2), pages 1-74.
    7. Manuel Arellano & Stephen Bond, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," Review of Economic Studies, Oxford University Press, vol. 58(2), pages 277-297.
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    Cited by:

    1. Bildirici, Melike E. & Turkmen, Ceren, 2015. "Nonlinear causality between oil and precious metals," Resources Policy, Elsevier, vol. 46(P2), pages 202-211.

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    Market power; commodity prices;


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