Findings from Ohio State University Provide New Insights into Economics (The Relationship Between Interest Rates and Agricultural Commodity Price Dynamics): Economics

Economics Daily Report

2024 NOV 05 (NewsRx) -- By a News Reporter-Staff News Editor at Economics Daily Report -- Current study results on Economics have been published. According to news reporting from Columbus, Ohio, by NewsRx journalists, research stated, “The U.S. Federal Reserve has undertaken several interest rate interventions in the past decade.”

The news correspondents obtained a quote from the research from Ohio State University, “This study explores the relationship between U.S. corn and soybean prices and Federal Reserve monetary policy interventions, in the short and long run. We use a nonlinear autoregressive distributed lag model to capture three key features of agricultural commodity price responses to changes in interest rates. First, we observe that corn and soybean prices initially overreact to changes in interest rates, overshooting their long-run equilibrium before gradually reverting. Second, in the short run, the relationship between soybean prices and interest rates is asymmetric; the initial price change is more pronounced for an interest rate increase than for a decrease of the same magnitude. Lastly, both corn and soybean prices display symmetry in the long run. These results help to understand how changes in interest rates affect commodity prices.”

According to the news reporters, the research concluded: “Assessing the relationship between agricultural commodity prices and interest rates can assist farmers and processors in planning investments and loans based on interest rate forecasts.”

This research has been peer-reviewed.

For more information on this research see: The Relationship Between Interest Rates and Agricultural Commodity Price Dynamics. Agribusiness, 2024. Agribusiness can be contacted at: Wiley, 111 River St, Hoboken 07030-5774, NJ, USA. (Wiley-Blackwell - http://www.wiley.com/; Agribusiness - http://onlinelibrary.wiley.com/journal/10.1002/(ISSN)1520-6297)

Our news journalists report that additional information may be obtained by contacting Ani L. Katchova, Ohio State University, Dept Agr Environm & Dev Econ, Columbus, OH 43210, United States.

The direct object identifier (DOI) for that additional information is: https://doi.org/10.1002/agr.21984. This DOI is a link to an online electronic document that is either free or for purchase, and can be your direct source for a journal article and its citation.