Commodity prices and inflation: an application of structural VAR

Understanding Global Commodity Price Shocks on Exchange Rates and Inflation in Emerging Economies: ARDL Perspective

“…Similarly, a study by Shahrazi et al [7] assessed global commodity prices, including oil, have a positive and statistically significant impact on inflation in Iran. Commodity price information, including convenience yields, enhances the ability to predict and assess inflation risk [29].…”

“…This current study builds on the same notion in assessing the impact of global commodity prices on the Ghanaian economy, within the lens of its inflator factor and exchange rates. According to the research by Shahrazi et al [7] there is mixed evidence regarding the relationship between global commodity prices and inflation. Some studies have found a positive and significant impact, while others have found no significant effect [9].…”

“…Commodity prices, such as cocoa, oil, gold, petrol, and diesel, have a significant impact on inflation. Previous studies by Abaidoo & Agyapong [10], Shahrazi et al [7] showed that the fluctuations in the prices of these commodities can lead to an increase or decrease in consumer price inflation. The relationship between commodity prices and inflation is complex and varies across different countries and periods.…”

“…These shocks can increase inflation rates, as seen in the case of Iran where global commodity prices were found to positively and significantly affect inflation [7]. The impact of globalization on inflation dynamics is also evident, with increased integration between developed economies and emerging countries leading to a direct impact on domestic inflation in emerging countries [8] Inflation in these countries can be influenced by disruptions in global trade channels, highlighting the structural nature of global inflation [9].…”