Publication detail

ECB monetary policy and commodity prices

Author(s): MSc. Shahriyar Aliyev ,
prof. Ing. Evžen Kočenda Ph.D., DSc.,
Type: Others
Year: 2022
Number: 8
Published in: FFA Working Paper
Publishing place: Prague University of Economics and Business
Keywords: European Central Bank, commodity prices, short-term interest rates, M2 stock, monetary aggregate, unconventional monetary policy, Structural Vector Autoregressive model, exchange rates.
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 a 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 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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