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An Empirical Study of Commodity Prices after S ir A rthur L ewis
Author(s) -
Ghoshray Atanu,
Perera Ashira
Publication year - 2016
Publication title -
the manchester school
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.361
H-Index - 42
eISSN - 1467-9957
pISSN - 1463-6786
DOI - 10.1111/manc.12123
Subject(s) - commodity , economics , econometrics , order (exchange) , production (economics) , microeconomics , finance
This paper builds on the work of Deaton and Laroque ( Journal of Development Economics , Vol. 71 (2003), pp. 289–310) by empirically testing for long‐run commodity price adjustment in a non‐linear framework. We propose a non‐linear adjustment mechanism of commodity price dynamics linked to the L ewis model. Using more recent data by updating the price, income and production indices, we employ advanced econometric techniques in order to investigate whether there is empirical evidence to support the arguments of the non‐linear model. The findings lend support to the underlying non‐linear framework proposed in this paper.