Publication detail

ECB monetary policy and commodity prices

Author(s): MSc. Shahriyar Aliyev ,
prof. Ing. Evžen Kočenda Ph.D., DSc.,
Type: Articles in journals with impact factor
Year: 2023
Number: 0
ISSN / ISBN: 0965-7576
Published in: Review of International Economics, 31(1), 274-304
Publishing place:
Keywords: European Central Bank, commodity prices, exchange rates, M2 stock, monetary aggregate, short-term interest rates, structural vector autoregressive model, unconventional monetary policy
JEL codes: C54, E43, E58, F31, G15, Q02
Suggested Citation:
Abstract: We assess the impact of ECB monetary policy on global aggregate and sectoral commodity prices over 2001–2019. We employ an SVAR model and separately assess periods before and after the global financial crisis. Our key results indicate that contractionary monetary policy shocks have positive effects on commodity prices during both conventional and unconventional monetary policy periods, indicating the effectiveness of unconventional monetary policy tools. The largest impact is documented on energy (fuel) and food commodities. Our results also suggest that the effect of ECB monetary policy on commodity prices transmits through the exchange rate channel, which influences European market demand.


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