Metals and Monetary Policy - The Role of Interest Rates Revisited
Posted: 27 Feb 2023
Date Written: February 14, 2023
Abstract
In this study, we analyze the effects of monetary policy on commodity prices, while accounting for the unconventional monetary policy actions, such as large scale asset purchase programs and forward guidance, implemented by the federal reserve in response to the near zero interest environment posterior to the financial crisis. A sub-period analysis reveals a stronger influence of interest rates on commodity prices prior to the financial crisis, while (unconventional) monetary policy still affects prices significantly in periods of zero interest rate policy. Our results are robust to several measures of unconventional monetary policy and highlight the importance to account for the entirety of monetary policy in econometric models.
JEL Classification: C01, E52, Q02
Suggested Citation: Suggested Citation