All Rights Reserved
AccessEcon LLC 2006, 2008.
Powered by MinhViet JSC
ralph lauren polo

 
Aviral Kumar Tiwari, Aruna Kumar Dash and Subhendu Dutta
 
''Testing the mean reversion in prices of agricultural commodities in India''
( 2015, Vol. 35 No.3 )
 
 
We tested the mean reversion property of 46 agricultural commodities of India covering the period 2000:M1-2013:M1. In doing so, we used two batteries of time series tests. One battery of test is associated with testing of the null hypothesis of a unit root whereas; second battery of test is associated with testing of the null hypothesis of stationarity. We find the robust evidence of stationarity for Betelnut/Arecanut, Black Pepper, Cardamom, Cummin, Garlic, Ginger (Fresh), Guava, Poultry chicken and Turmeric. This indicates that any policy to influence the prices of these commodities will not have a permanent impact as they have a tendency to revert to the mean. Thus, we recommend to the Policymakers/Government to review the commodity futures ban for these commodities. However, if Government/Policymakers wish to control the food prices, they need to make policies which influence the prices of the commodities exhibiting the unit root behaviour. And any policy shock to these commodities will have the permanent impact and therefore, the Government/Policymaker can consider for commodity futures ban.
 
 
Keywords: Unit Root, Inflation, Agricultural Commodity Prices, India
JEL: Q1 - Agriculture: General
E3 - Prices, Business Fluctuations, and Cycles: General (includes Measurement and Data)
 
Manuscript Received : Nov 25 2014 Manuscript Accepted : Sep 07 2015

  This abstract has been downloaded 573 times                The Full PDF of this paper has been downloaded 104272 times