World Commodity Prices as a Forecasting Tool for Retail Prices : Evidence From the United Kingdom /

This paper investigates, using cointegration and Granger-causality techniques, whether a stable long-run co-movement exists between world commodity prices and U.K. retail prices, and whether short-run changes in commodity prices convey information about future movements in U.K. retail prices. The re...

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Bibliographic Details
Main Author: Thornton, John
Other Authors: Garcia-Herrero, Alicia
Format: Journal
Language:English
Published: Washington, D.C. : International Monetary Fund, 1997.
Series:IMF Working Papers; Working Paper ; No. 1997/070
Online Access:Full text available on IMF
Description
Summary:This paper investigates, using cointegration and Granger-causality techniques, whether a stable long-run co-movement exists between world commodity prices and U.K. retail prices, and whether short-run changes in commodity prices convey information about future movements in U.K. retail prices. The results show noncointegration and no unidirectional Granger causality from commodity to retail prices. These findings suggest that little may be gained from using developments in commodity prices to forecast movements in retail prices in the inflation-targeting framework followed by the U.K. monetary authorities.
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Physical Description:1 online resource (15 pages)
Format:Mode of access: Internet
ISSN:1018-5941
Access:Electronic access restricted to authorized BRAC University faculty, staff and students