|
|
Article: The commodity-consumer price connection: fact or fable?(includes an appendix on alternative econometric methodologies)
- Article from:
- Federal Reserve Bank of New York Economic Policy Review
- Article date:
- October 1, 1995
- Author:
CopyrightCOPYRIGHT 1995 Federal Reserve Bank of New York. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
|
Interest in commodity prices as indicators of consumer price inflation has ebbed and flowed with the rise and fall in commodity prices themselves. True to form, as commodity prices have surged in the last two years (Chart 1), interest in their predictive power has returned. Inflation hawks point to an outpouring of studies in the late 1980s showing a strong empirical connection between commodity prices and subsequent consumer inflation. Indeed, the concern over commodities has grown to the point where even two previously obscure commodity indexes - the National Association of Purchasing Managers price index (NAPM) and the Federal Reserve Bank of Philadelphia's prices paid ...