Industrial Insight

Inflation will support Commodity prices and finance recapitalization | November 11, 2010

http://www.econbrowser.com/archives/2010/11/commodity_infla_2.html

November 10, 2010

Commodity inflation

Rolling-window correlation between oil prices and copper prices. Graph plots correlation between (1) change in natural log of dollar price of West Texas Intermediate over previous 5 business days and (2) change in natural log of the dollar price of copper cathodes over previous 5 business days, as estimated from the most recent 200 business days as of each indicated date, Oct 28, 1999 to Nov 5, 2010.

Actual and predicted oil prices. Solid line: actual price of West Texas Intermediate (in dollars per barrel), Sep 1, 2010 to Nov 5, 2010. Dashed line: Sept 1 price times exp(1.3 times change in natural logarithm of exchange rate since Sep 1).
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