How persistent are shocks to world commodity prices?

This paper examines the persistence of shocks to world commodity prices, us ing monthly IMF data on primary commodities between 1957-98, We find that s hocks to commodity prices are typically long-lasting and the variability of the persistence of price shocks is quite wide. The paper also discusses th e implications of these findings for national and international schemes to stabilize earnings from commodity exports and finds that if price shocks ar e long-lived, then the cost of stabilization schemes will likely exceed any associated smoothing benefits. [JEL C22, O13, O19, Q11, Q17].