Evaluating the simultaneity of cycles of food prices, with oil and gold prices

Document Type : Scientific paper

Authors

1 professor of economics, economics department, Beheshty University

2 Alameh Tabatabaei University

3 ferdowsi university

Abstract

The relationship between economic variables is one of the most important topics in economic literature. Investigating the effect of global oil prices and metal prices on the increase in food prices in recent years has attracted the attention of policymakers and economic researchers as well. Therefore, by using Markov-switching models, this article analyzes food, oil and gold cycles. It determines the correlation between the cycles in question in the period from 1995 to 2022. Based on the results, the correlation between food prices, gold prices and oil prices is positive. Also, the relationship between food prices and gold prices in regime zero (boom) and between food prices and oil prices in regime one (recession) has a more vital link. In oil price models, the length of increasing periods is longer than decreasing periods, but in gold models, it is the opposite. According to the results of the estimated models and the related method, this article indicates the meaningful relationship between the economic variables in the period in question. Hence, considering the relationship between food prices on the one hand and oil and gold prices on the other hand, the results of this article does have significant implication both for the public and private sectors.

Keywords

Main Subjects

References

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Macroeconomics Research Letter
Volume 17, Issue 36
December 2022
Pages 7-38

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History

  • Receive Date: 10 April 2023
  • Revise Date: 28 July 2023
  • Accept Date: 05 August 2023

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