Details
| Original language | English |
|---|---|
| Number of pages | 15 |
| Journal | Journal of applied econometrics |
| Publication status | Accepted/In press - 1 Aug 2024 |
Abstract
We examine how regional cost shocks are passed through into the prices of globally traded energy-intensive commodities. We find that the pass-through of local costs is influenced by production capacity in the short run. When capacity constraints become binding, the pass-through of cost shocks to the constrained region diminishes to zero. Our application to the market for ammonia, a commodity largely produced from natural gas, demonstrates the significance of capacity constraints and international market linkages for empirical pass-through models.
Keywords
- ammonia, capacity constraints, energy-intensive trade-exposed industries, market integration, pass-through
ASJC Scopus subject areas
- Social Sciences(all)
- Social Sciences (miscellaneous)
- Economics, Econometrics and Finance(all)
- Economics and Econometrics
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In: Journal of applied econometrics, 01.08.2024.
Research output: Contribution to journal › Article › Research › peer review
}
TY - JOUR
T1 - Cost Pass-Through in Commodity Markets With Capacity Constraints and International Linkages
AU - Ellwanger, Reinhard
AU - Gnutzmann, Hinnerk
AU - Śpiewanowski, Piotr
N1 - Publisher Copyright: © 2024 John Wiley & Sons Ltd.
PY - 2024/8/1
Y1 - 2024/8/1
N2 - We examine how regional cost shocks are passed through into the prices of globally traded energy-intensive commodities. We find that the pass-through of local costs is influenced by production capacity in the short run. When capacity constraints become binding, the pass-through of cost shocks to the constrained region diminishes to zero. Our application to the market for ammonia, a commodity largely produced from natural gas, demonstrates the significance of capacity constraints and international market linkages for empirical pass-through models.
AB - We examine how regional cost shocks are passed through into the prices of globally traded energy-intensive commodities. We find that the pass-through of local costs is influenced by production capacity in the short run. When capacity constraints become binding, the pass-through of cost shocks to the constrained region diminishes to zero. Our application to the market for ammonia, a commodity largely produced from natural gas, demonstrates the significance of capacity constraints and international market linkages for empirical pass-through models.
KW - ammonia
KW - capacity constraints
KW - energy-intensive trade-exposed industries
KW - market integration
KW - pass-through
UR - http://www.scopus.com/inward/record.url?scp=85211214681&partnerID=8YFLogxK
U2 - 10.1002/jae.3098
DO - 10.1002/jae.3098
M3 - Article
AN - SCOPUS:85211214681
JO - Journal of applied econometrics
JF - Journal of applied econometrics
SN - 0883-7252
ER -