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Nominal Exchange Rate Variation and World Commodity Price Variation: The Cases of Australia, Canada, and New Zealand

Applied Economics Journal

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Title Nominal Exchange Rate Variation and World Commodity Price Variation: The Cases of Australia, Canada, and New Zealand
 
Creator Kulthanavit, Pisut; Faculty of Economics, Thammasat University, Bangkok, 10200.
Bunnag, Thanyakorn; Faculty of Economics, Thammasat University, Bangkok, 10200.
 
Subject Exchange rate volatility, Commodity price variation
E3, F4
 
Description World commodity prices have moved and fluctuated over time especially, the period 2000-2009. This paper examines the impact of Australia’s, Canada’s, and New Zealand’s nominal exchange rate variation on world commodity price variations in 1980-2012 and compare the impact between 1990-1999 and 2000-2009. This study employs a dynamic ordinary least square regression (DOLS) to estimate correlation coefficients that measure the volatility effects. The results show that in long-run (1980-2012), the Australian dollar, Canadian dollar, and New Zealand dollar variation raise the world commodity price variations for hard commodity which are fuel products and metal products while nominal exchange rate variation has various effects on the world commodity price variations for soft commodity which are grain products, forestry products, and livestock products. Moreover, comparison of the period 1990-1999 and the period 2000-2009 implies that exchange rate variation raises the world commodity price variations which almost price is hard commodity. Hence, the government of these hard commodities exporting countries should become aware of exchange rate variation and look after the variation because the variation causes income of export sector. In the case of developing countries, should consider exchange rate policy that impacts export sector and the economy along with give priority to future market development to be tools for absorb exchange rate variation risks.
 
Publisher The Center for Applied Economics Research (CAER)
 
Contributor —
 
Date 2016-05-20
 
Type info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion
Peer-reviewed Article
 
Format application/pdf
 
Identifier http://www.tci-thaijo.org/index.php/AEJ/article/view/57245
 
Source Applied Economics Journal; Vol 21, No 2 (2014): DECEMBER; 72-99
0858-9291
 
Relation http://www.tci-thaijo.org/index.php/AEJ/article/view/57245/47447
 
Rights Copyright (c) 2016 Applied Economics Journal
http://creativecommons.org/licenses/by-nc-nd/4.0