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Booms and Slumps in World Commodity Prices

1999; RELX Group (Netherlands); Linguagem: Inglês

10.2139/ssrn.880682

1556-5068

Paul Cashin, C. John McDermott, Alasdair Scott,

Natural Resources and Economic Development

This paper examines the duration and magnitude of commodity-price cycles. It finds that for most 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 rebound in a subsequent boom. There is little evidence of a consistent `shape` to commodity-price cycles. 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.