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Commodity Price Dynamics and Anticipated Shocks
Author(s) -
Lai Chingchong,
Hu Shihwen,
Wang Vey
Publication year - 1996
Publication title -
american journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.949
H-Index - 111
eISSN - 1467-8276
pISSN - 0002-9092
DOI - 10.2307/1243854
Subject(s) - economics , shock (circulatory) , commodity , robustness (evolution) , monetary economics , agriculture , price shock , finance , medicine , ecology , biochemistry , chemistry , biology , gene
In this paper we address the robustness of overshooting hypothesis in agricultural prices. We find that agricultural prices may undershoot their long‐run level if the economy experiences an anticipated monetary shock rather than an unanticipated monetary shock. We also find that agricultural prices definitely display undershooting if the price of manufactures adjusts instantaneously rather than sluggishly.