Global liquidity driving commodity prices higher than consumer goods, study finds.
The article explores how money, consumer prices, and commodity prices are connected globally from 1970 to 2008. By analyzing data from major OECD countries, the researchers found that global liquidity plays a key role in shaping these relationships. They discovered that different price behaviors in commodity and consumer markets can explain why commodity prices have been rising faster than consumer prices. Despite the long study period, tests showed that their model fits the data well.