Dynamics of International Commodity Prices and Their Macroeconomic Influence in Peru: A Time Series Econometric Analysis (1990-2023)
DOI:
https://doi.org/10.5281/zenodo.22680288Keywords:
Public sector, digitalization, occupational health, teleworking, labor welfareAbstract
This study comprehensively analyzes the influence of fluctuations in international prices of key commodities (copper, gold, zinc, fishmeal, and WTI crude oil) on Peru's main macroeconomic variables (real Gross Domestic Product, inflation rate, and nominal exchange rate) over the quarterly period 1990-2023. Employing a Vector Error Correction Model (VECM), significant cointegration relationships were identified, indicating a long-run equilibrium link between commodity prices and the Peruvian economy. The results reveal that positive shocks in the prices of export metals, particularly copper and gold, significantly boost Peruvian real GDP growth in the short term. Conversely, increases in the WTI crude oil price exert a contractionary effect. Impulse Response Functions show persistent response dynamics, and Forecast Error Variance Decomposition underscores the preponderance of copper and gold prices as exogenous sources of GDP fluctuation in the medium and long term. These findings have crucial implications for fiscal and monetary policy, and economic diversification strategies in Peru.
Downloads
References
Abaidoo, R., & Agyapong, E. (2024). Commodity prices, inflation and inflation uncertainty among emerging economies. Journal of Economic and Administrative Sciences, 40(3), 622-640. https://doi.org/10.1108/JEAS-10-2021-0203
Abbas, G., & Lan, H. (2020). Commodity price pass-through and inflation regimes. Energy Economics, 92, 104977. https://doi.org/10.1016/j.eneco.2020.104977
Ahmad, I., Iqbal, S., Khan, S., Han, H., Vega, A., & Ariza, A. (2022). Macroeconomic effects of crude oil shocks: Evidence from South Asian countries. Frontiers in psychology, 13, 967643. https://www.frontiersin.org/articles/10.3389/fpsyg.2022.967643/full
Barbaglia, L., Croux, C., & Wilms, I. (2020). Volatility spillovers in commodity markets: A large t-vector autoregressive approach. Energy Economics, 85, 104555. https://doi.org/10.1016/j.eneco.2019.104555
Boakye, E. O., Heimonen, K., & Junttila, J. (2022). Assessing the commodity market price and terms of trade exposures of macroeconomy in emerging and developing countries. Emerging Markets Finance and Trade, 58(8), 2243-2257. https://doi.org/10.1080/1540496X.2021.1971074
Carrington, S. J., Olarte, S. H., & Urbina, G. (2023). Commodity cycle management in Latin America: The importance of resilience in face of vulnerability. Resources Policy, 81, 103316. https://doi.org/10.1016/j.resourpol.2023.103316
Chávez, P., & Rodríguez, G. (2023). Time changing effects of external shocks on macroeconomic fluctuations in Peru: Empirical application using regime-switching VAR models with stochastic volatility. Review of World Economics, 159, 505–544. https://doi.org/10.1007/s10290-022-00474-1
Chen, L., Verousis, T., Wang, K., & Zhou, Z. (2023). Financial stress and commodity price volatility. Energy Economics, 125, 106874. https://doi.org/10.1016/j.eneco.2023.106874
Coayla, E., Bedón, Y., Rosales, T., & Jiménez, L. (2023). Industrial Marine Fishing in the Face of Climate Change in Peru. Journal of Marine Sciences, 2023(1), 9984319. https://doi.org/10.1155/2023/9984319
Duarte, A., Gaglianone, W., de Carvalho, O., & Issler, J. (2021). Commodity prices and global economic activity: a derived-demand approach. Energy Economics, 96, 105120.https://doi.org/10.1016/j.eneco.2021.105120
Fernandes, L. H., de Araujo, F. H., & Tabak, B. M. (2021). Insights from the (in) efficiency of Chinese sectoral indices during COVID-19. Physica A: Statistical Mechanics and its Applications, 578, 126063. https://www.sciencedirect.com/science/article/pii/S0378437121003368
Flechtner, S., & Middelanis, M. (2024). The role of the commodity price boom in shaping public social spending: Evidence from Latin America. World Development, 182, 106717. https://www.sciencedirect.com/science/article/pii/S0305750X24001876
Ge, X., & Tang, K. (2020). Commodity prices and GDP growth. International Review of Financial Analysis, 70, 101512. https://doi.org/10.1016/j.irfa.2020.101512
Inogamov, S., & Leon, R. (2024). Inflation comovement in emerging economies: The facts and impact of global prices. Journal of Asian Economics, 94, 101794.. https://doi.org/10.1016/j.asieco.2024.101794
Juvenal, L., & Petrella, I. (2024). Unveiling the dance of commodity prices and the global financial cycle. IMF Working Papers, 2024(082). https://doi.org/10.5089/9798400271618.001
Liu, L., Tan, S., & Wang, Y. (2020). Can commodity prices forecast exchange rates?. Energy Economics, 87, 104719. https://doi.org/10.1016/j.eneco.2020.104719
Mien, E., & Goujon, M. (2021). 40 years of Dutch Disease literature: lessons for developing countries. Comparative Economic Studies, 64(3), 351. https://pmc.ncbi.nlm.nih.gov/articles/PMC8609513/
Naraidoo, R., & Paez, J. (2023). Commodity price shocks, labour market dynamics and monetary policy in small open economies. Journal of Economic Dynamics and Control, 151, 104654. https://doi.org/10.1016/j.jedc.2023.104654
Sathya, K., & Karthiban, R. (2021). Time Series Analysis on Agricultural Commodity Prices. Asian Journal of Applied Science and Technology (AJAST), 5(2), 36-41. http://doi.org/10.38177/ajast.2021.5205
?en, A., Akpolat, A., & Balkan, ?. (2024). Commodity prices and economic growth: Empirical evidence from countries with different income groups. Heliyon, 10(13). https://doi.org/10.1016/j.heliyon.2024.e34038
S&P Global Ratings. (2025). Economic research: Understanding the decoupling of copper prices and GDP growth in Chile and Peru. S&P Global Ratings. https://www.spglobal.com/ratings/en/research/articles/250224-economic-research-understanding-the-decoupling-of-copper-prices-and-gdp-growth-in-chile-and-peru-13424065
Schedelik, M., Nölke, A., May, C., & Gomes, A. (2023). Dependency revisited: Commodities, commodity-related capital flows and growth models in emerging economies. European Journal of Economics and Economic Policies: Intervention, 20(3), 515-531. https://doi.org/10.4337/ejeep.2023.0107
Urbina, D., & Rodríguez, G. (2022). Evolution of the effects of mineral commodity prices on fiscal fluctuations: Empirical evidence from TVP-VAR-SV models for Peru. Review of World Economics, 159(1), 153-184. https://doi.org/10.1007/s10290-022-00460-7
Zou, X. (2018). VECM model analysis of carbon emissions, GDP, and international crude oil prices. Discrete Dynamics in Nature and Society, 2018(1), 5350308. https://onlinelibrary.wiley.com/doi/abs/10.1155/2018/5350308
Published
How to Cite
Issue
Section
License
The authors exclusively transfer the right to publish their article to our journal, which may formally edit or modify the approved text to comply with its own editorial norms and universal grammatical standards, before publication; Likewise, our journal may translate approved manuscripts into as many languages as it deems necessary and disseminate them in several countries, always giving public recognition to the author or authors of the research.
