Publication:
Placing the 2006/08 Commodity Price Boom into Perspective

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dc.contributor.authorHaniotis, Tassos
dc.contributor.authorBaffes, John
dc.date.accessioned2012-03-19T18:41:01Z
dc.date.available2012-03-19T18:41:01Z
dc.date.issued2010-07-01
dc.description.abstractThe 2006-08 commodity price boom was one of the longest and broadest of the post-World War II period. Apart from strong and sustained economic growth, the recent boom was fueled by numerous factors, including low past investment in extractive commodities, weak dollar, fiscal expansion, and lax monetary policy in many countries, and investment fund activity. At the same time, the combination of adverse weather conditions, the diversion of some food commodities to the production of biofuels, and government policies (including export bans and prohibitive taxes) brought global stocks of many food commodities down to levels not seen since the early 1970s. This in turn accelerated the price increases that eventually led to the 2008 rally. The weakening and/or reversal of these factors coupled with the financial crisis that erupted in September 2008 and the subsequent global economic downturn, induced sharp price declines across most commodity sectors. Yet, the main price indices are still twice as high compared to their 2000 real levels, begging once more the question about the real factors affecting them. This paper concludes that a stronger link between energy and non-energy commodity prices is likely to be the dominant influence on developments in commodity, and especially food, markets. Demand by emerging economies is unlikely to put additional pressure on the prices of food commodities. The paper also argues that the effect of biofuels on food prices has not been as large as originally thought, but that the use of commodities by financial investors (the so-called "financialization of commodities") may have been partly responsible for the 2007/08 spike. Finally, econometric analysis of the long-term evolution of commodity prices supports the thesis that price variability overwhelms price trends.en
dc.identifierhttp://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20100721110120
dc.identifier.doi10.1596/1813-9450-5371
dc.identifier.urihttps://hdl.handle.net/10986/3855
dc.languageEnglish
dc.relation.ispartofseriesPolicy Research working paper ; no. WPS 5371
dc.rightsCC BY 3.0 IGO
dc.rights.holderWorld Bank
dc.rights.urihttp://creativecommons.org/licenses/by/3.0/igo/
dc.subjectAGRICULTURAL COMMODITIES
dc.subjectAGRICULTURAL COMMODITY
dc.subjectAGRICULTURAL PRICE
dc.subjectAGRICULTURAL PRICES
dc.subjectAPPROACH
dc.subjectASSET MANAGERS
dc.subjectASSET PRICES
dc.subjectAVAILABILITY
dc.subjectAVERAGE PRICE
dc.subjectBACKBONE
dc.subjectBANDWIDTH
dc.subjectBARRELS PER DAY
dc.subjectBARTER
dc.subjectBUFFER STOCKS
dc.subjectCENTRAL BANK
dc.subjectCEREAL PRICES
dc.subjectCOFFEE PRICES
dc.subjectCOMMERCE
dc.subjectCOMMERCIAL ACTIVITY
dc.subjectCOMMERCIAL BANK
dc.subjectCOMMODITIES
dc.subjectCOMMODITY
dc.subjectCOMMODITY BOOM
dc.subjectCOMMODITY BOOMS
dc.subjectCOMMODITY EXCHANGES
dc.subjectCOMMODITY FUTURES
dc.subjectCOMMODITY INDEX
dc.subjectCOMMODITY MARKET
dc.subjectCOMMODITY MARKETS
dc.subjectCOMMODITY PRICE
dc.subjectCOMMODITY PRICE INDEX
dc.subjectCOMMODITY PRICE INDICES
dc.subjectCOMMODITY PRICES
dc.subjectCOMMODITY PRODUCERS
dc.subjectCOMMODITY SECTORS
dc.subjectCOMMODITY TRADING
dc.subjectCOTTON PRICES
dc.subjectCRUDE OIL
dc.subjectCRUDE OIL PRICE
dc.subjectCURRENCY
dc.subjectDEBT
dc.subjectDEMAND GROWTH
dc.subjectDEVELOPING COUNTRIES
dc.subjectDEVELOPING COUNTRY
dc.subjectDIVERSIFICATION BENEFITS
dc.subjectDOMESTIC MARKETS
dc.subjectECONOMIC ACTIVITY
dc.subjectECONOMIC COOPERATION
dc.subjectECONOMIC CRISIS
dc.subjectECONOMIC DEVELOPMENT
dc.subjectECONOMIC DOWNTURN
dc.subjectEFFICIENT MARKET
dc.subjectEMERGING ECONOMIES
dc.subjectENERGY MARKETS
dc.subjectENERGY PRICE
dc.subjectENERGY PRICES
dc.subjectENVIRONMENTAL BENEFITS
dc.subjectEQUILIBRIUM PRICE
dc.subjectEQUITIES
dc.subjectETHANOL
dc.subjectETHANOL PRODUCTION
dc.subjectEXCESS LIQUIDITY
dc.subjectEXCHANGE MARKET
dc.subjectEXCHANGE MARKETS
dc.subjectEXCHANGE RATE
dc.subjectEXCHANGE RATES
dc.subjectEXPENDITURES
dc.subjectFEEDSTOCK
dc.subjectFEEDSTOCKS
dc.subjectFINANCIAL CRISIS
dc.subjectFINANCIAL INSTITUTIONS
dc.subjectFINANCIAL MARKETS
dc.subjectFINANCIAL TRANSACTIONS
dc.subjectFOOD COMMODITIES
dc.subjectFOOD COMMODITY
dc.subjectFOOD PRICE
dc.subjectFOOD PRICES
dc.subjectFOSSIL
dc.subjectFOSSIL FUEL
dc.subjectFOSSIL FUEL USE
dc.subjectFUEL
dc.subjectFUEL CONSUMPTION
dc.subjectFUEL PRODUCTION
dc.subjectFUND MANAGERS
dc.subjectFUTURE PRICE
dc.subjectFUTURES
dc.subjectFUTURES CONTRACT
dc.subjectFUTURES MARKET
dc.subjectFUTURES MARKETS
dc.subjectFUTURES TRADING
dc.subjectGAS COMPANIES
dc.subjectGASOLINE
dc.subjectGASOLINE PRICES
dc.subjectGLOBAL ECONOMIC PROSPECTS
dc.subjectGLOBAL ECONOMY
dc.subjectGLOBALIZATION
dc.subjectGOVERNMENT INTERVENTION
dc.subjectGOVERNMENT POLICIES
dc.subjectGREENHOUSE GASES
dc.subjectGROWTH RATES
dc.subjectHEDGE FUND
dc.subjectHEDGE FUNDS
dc.subjectHEDGING
dc.subjectHIGH ENERGY INTENSITY
dc.subjectINCOME
dc.subjectINCOMES
dc.subjectINFLATION
dc.subjectINSURANCE
dc.subjectINTEREST RATE
dc.subjectINTEREST RATES
dc.subjectINTERNATIONAL COCOA AGREEMENT
dc.subjectINTERNATIONAL COMMODITY AGREEMENTS
dc.subjectINVENTORIES
dc.subjectINVESTMENT PORTFOLIOS
dc.subjectINVESTMENT VEHICLE
dc.subjectINVESTMENT VEHICLES
dc.subjectINVISIBLE HAND
dc.subjectLIMITS TO GROWTH
dc.subjectLIQUID ASSETS
dc.subjectMANUFACTURING
dc.subjectMARKET CONDITIONS
dc.subjectMARKET DEVELOPMENTS
dc.subjectMARKET EFFICIENCY
dc.subjectMARKET FAILURE
dc.subjectMARKET INEFFICIENCIES
dc.subjectMARKET INTEGRATION
dc.subjectMARKET MANIPULATION
dc.subjectMARKET PRICE
dc.subjectMARKET PRICES
dc.subjectMARKET VOLATILITY
dc.subjectMARKETING
dc.subjectMONETARY POLICY
dc.subjectNATURAL GAS
dc.subjectNEW TECHNOLOGY
dc.subjectNITROGEN
dc.subjectNITROGEN FERTILIZER
dc.subjectOIL MARKETS
dc.subjectOIL PRICES
dc.subjectOIL PRODUCTION
dc.subjectOIL SHOCKS
dc.subjectOIL SPILLS
dc.subjectOILS
dc.subjectOUTPUT
dc.subjectOUTPUTS
dc.subjectPDF
dc.subjectPENSION
dc.subjectPENSION FUNDS
dc.subjectPETROLEUM
dc.subjectPETROLEUM PRICES
dc.subjectPORTFOLIO
dc.subjectPORTFOLIOS
dc.subjectPRICE BEHAVIOR
dc.subjectPRICE CHANGES
dc.subjectPRICE DISCOVERY
dc.subjectPRICE FORECAST
dc.subjectPRICE INCREASE
dc.subjectPRICE INCREASES
dc.subjectPRICE INDEX
dc.subjectPRICE INDICES
dc.subjectPRICE LEVELS
dc.subjectPRICE MOVEMENTS
dc.subjectPRICE OF OIL
dc.subjectPRICE SERIES
dc.subjectPRICE SPIKES
dc.subjectPRICE STABILIZATION
dc.subjectPRICE TRENDS
dc.subjectPRICE VOLATILITY
dc.subjectPRICES OF ENERGY
dc.subjectPRIMARY COMMODITIES
dc.subjectPRIMARY COMMODITY
dc.subjectPRODUCTION OF ETHANOL
dc.subjectPRODUCTIVITY
dc.subjectPUBLIC POLICY
dc.subjectR&D
dc.subjectRAW MATERIALS
dc.subjectREAL ESTATE
dc.subjectRENEWABLE ENERGY
dc.subjectRESULT
dc.subjectRESULTS
dc.subjectRETAIL
dc.subjectSEARCH
dc.subjectSECURITIES
dc.subjectSECURITY CONCERNS
dc.subjectSOYBEAN OIL
dc.subjectSPECULATIVE BUBBLE
dc.subjectSPOT PRICE
dc.subjectSPREAD
dc.subjectSTOCKS
dc.subjectSTORAGE FACILITIES
dc.subjectSUBSTITUTE
dc.subjectSUPPLY SHOCKS
dc.subjectTARGETS
dc.subjectTIME PERIOD
dc.subjectTRADING ACTIVITIES
dc.subjectTRANSACTION
dc.subjectTRANSMISSION
dc.subjectUSES
dc.subjectVOLATILITY
dc.subjectWEB
dc.subjectWEBLOG
dc.subjectWORLD ECONOMY
dc.subjectWORLD MARKET
dc.subjectWORLD TRADE
dc.titlePlacing the 2006/08 Commodity Price Boom into Perspectiveen
dspace.entity.typePublication
okr.crossref.titlePlacing The 2006/08 Commodity Price Boom Into Perspective
okr.date.disclosure2010-07-21
okr.date.doiregistration2025-04-10T11:46:07.175904Z
okr.doctypePublications & Research::Policy Research Working Paper
okr.docurlhttp://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20100721110120
okr.globalpracticeEnergy and Extractives
okr.guid921521468326680723
okr.identifier.doi10.1596/1813-9450-5371
okr.identifier.externaldocumentum000158349_20100721110120
okr.identifier.internaldocumentum12569926
okr.identifier.reportWPS5371
okr.language.supporteden
okr.pdfurlhttp://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2010/07/21/000158349_20100721110120/Rendered/PDF/WPS5371.pdfen
okr.region.administrativeThe World Region
okr.region.administrativeThe World Region
okr.topicEnergy::Energy Production and Transportation
okr.unitDevelopment Research Group (DECRG)
okr.volume1 of 1
relation.isAuthorOfPublication18b25906-9cb0-519d-95a9-8bfd4c5a3666
relation.isAuthorOfPublication.latestForDiscovery18b25906-9cb0-519d-95a9-8bfd4c5a3666
relation.isSeriesOfPublication26e071dc-b0bf-409c-b982-df2970295c87
relation.isSeriesOfPublication.latestForDiscovery26e071dc-b0bf-409c-b982-df2970295c87
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