Evgenia Passari

13/13 Full paper here: [https://cepr.org/publications/dp21244] #CommodityMarkets #MacroeconomicShocks #SupplyChains #IranRisks

12/13 Our framework provides policymakers and market participants a new lens to understand commodity market disruptions and their heterogeneous global impacts.

11/13 Was the COVID supply chain experience exceptional? Our work shows diverse commodity disruptions systematically shape macro outcomes—COVID-19 was just part of a broader pattern.

10/13 For central banks: this means different policy responses required depending on your country's commodity position. One-size-fits-all tightening could exacerbate output losses for net importers.

9/13 Net exporters are partially insulated, able to offset higher import costs with commodity revenue gains. The following four figures show the response of industrial production on oil supply (top row) and non-oil supply disturbances (bottom row) across commodity importing and exporting countries.

8/13 Net importers of both oil and non-oil commodities (think most European and Asian nations) face a double whammy: stronger inflation pass-through and more persistent output contractions.

7/13 To illustrate: consider the response of inflation to a negative commodity supply development driven by geopolitical risk. The following four figures show the response of inflation on oil (top row) and non-oil supply disturbances (bottom row) across commodity importing and exporting countries.

6/13 Relevant *right now*: the response of inflation and output to supply-side shocks driven by geopolitical risk dominates. For a potential conflict escalation, this means: initial inflation spikes across most economies, but the effects differ dramatically between net importers vs. exporters.

5/13 Our most striking finding is that supply disturbances in non-oil commodities (natural gas, metals, grains, etc.) affect inflation and industrial production at least as strongly as oil. The literature's narrow focus has severely understated commodity shocks' importance.

4/13 Our innovation: automated narrative analysis to create daily supply and demand proxies of shocks for 20 commodities. We further decompose commodity fluctuations into key drivers including geopolitical risk, natural disasters, and climate change.

3/13 Why? Because modern economies depend on a much broader commodity basket. The COVID-19 pandemic, Ukraine, and current geopolitical tensions make this gap impossible to ignore.

2/13 Our @cepr.org WP "Beyond Oil: The Origins of Commodity Price Fluctuations", with Alvin Lumbanraja, Sarah Mouabbi and Adrien Rousset Planat, analyzes 1.1 million news articles to build the first comprehensive framework measuring supply/demand disturbances across the entire commodity space.

1/13 As Middle East tensions escalate, markets are fixated on oil prices. But our new research suggests the economic fallout from Iran conflict goes way beyond oil as the Strait of Hormuz—a critical shipping chokepoint—remains closed, with some countries facing much harder recoveries than others.

📣 The call for the 9th Dauphine Finance PhD Workshop joint with the @cepr_org is out! Submit your best work by the 10th of April via the CEPR platform and see you in Paris in June! Excited to host Janet Gao who will be delivering the keynote address. @univdauphine.bsky.social @cepr.org

«On ne sait pas où tout ça va atterrir» : comment les Bourses s’adaptent aux annonces de Donald Trump Depuis plusieurs jours, le président américain multiplie les menaces commerciales envers les pays européens qui s’opposent à sa volonté de s’emparer du Groenland. En baisse, les marchés financiers son...

My two cents on markets’ reaction to the Greenland trade war on Libération today:

www.liberation.fr/economie/on-...

US Firms Are Snapping Up the Rare Earths Europe Needs to Rearm As Europe embarks on a historic rearming effort, its defense companies are scrambling for a vital component in high-tech weapons: rare earth minerals, which more nimble US rivals are scooping up.

More rare earths depression for Europe. It's too slow so US rivals getting supplies first

“If we look at how long it takes us on average to sell, say, a ton of terbium to a European partner, we’re talking 3-4 weeks; with the Americans it’s more 3-4 days"

Graph showing net demand indices and the business cycle. Commodity prices have historically been considered leading indicators of inflation, but the relationship has weakened since the mid-1980s, making them less reliable predictors. This column analyses more than a million Reuters news articles between 2001 and 2023 to capture supply and demand dynamics in commodity markets. The findings show that text-based indicators of supply and demand disturbances significantly enhance inflation forecasting accuracy, allowing policymakers to better understand the nature of inflationary pressures and adjust their responses accordingly.

Dimitris Malliaropulos, @evgeniapassari.bsky.social, & Filippos Petroulakis analyse more than one million Reuters news articles and find that text-based indicators of supply and demand disturbances significantly enhance #inflation forecasting accuracy.
cepr.org/voxeu/column...
#EconSky

📣 Today at #EEA2025 Congress @bsebordeaux.bsky.social @univbordeaux.bsky.social, we are pleased to be listening to Helene Rey @helene-rey.bsky.social (London Business School)
discuss Geoeconomics and Strategic Minerals for the Green Transition

Determinants and consequences of populism still in vogue. Featuring our 2018 Brookings paper with Sergei, Elias and Yann.

Talking With Hélène Rey The international role of the dollar and more

open.substack.com/pub/paulkrug...

In 2014, half of Greece's electricity was generated by coal.

A decade later, that share has fallen to just 6%.

Looking forward to the 8th edition of the Dauphine Finance PhD Workshop, this year orginized jointly with the @cepr.org with the kind support of Labex Louis Bachelier. Fantastic papers and keynote lecture by Wenxin Du. Register by e-mail at dauphine.workshop@gmail.com by July 4th!

Looking forward to seeing you at our upcoming "Tech 4 Finance: AI and Blockchain" Conference, organized by Chaire Fintech Dauphine on May 19-20, 2025 at @univdauphine.bsky.social. Link to the program and registration: dauphine.psl.eu/en/fintech-c... Keynote by @dimitrispapan.bsky.social

4 days to apply to the 8th Dauphine Finance PhD Workshop joint with the @cepr.org ! @univdauphine.bsky.social

China’s rare earths controls prompt fears of auto shortages and shutdowns Traders and executives warn of limited inventories and a risk of disruption to automotive production

A senior automotive executive described China’s latest export controls on rare earth minerals as a 7 or 8 on a scale of 1 to 10 in terms of severity.

on.ft.com/42ujjqk

China Halts Critical Rare Earth Exports as Trade War Intensifies (Gift Article) Beijing has suspended exports of certain rare earth minerals and magnets that are crucial for the world’s car, semiconductor and aerospace industries.

It's kind of telling that Trump thought he was punishing China by making it prohibitively expensive for American manufacturers to buy critically important inputs, and China countered by making it impossible for American manufacturers to buy critically important inputs
www.nytimes.com/2025/04/13/b...

The call for the 8th Dauphine Finance PhD Workshop joint with the @cepr.org is out! Submit your best work by the 27th of April via the CEPR platform and see you in Paris in July. Excited to host Wenxin Du who will be delivering the keynote address. @univdauphine.bsky.social

In Merz We Truss: Financial Market Reaction to Germany’s Fiscal Package | Kiel InstituteMenu • This study analyzes capital market reactions to Germany’s recent announcement of loosening fiscal restrictions for defense and state-level spending, while establishing a €500 billion infrastructure ...

New @kiel.institute Policy Brief (with @filpet4.bsky.social): How are capital markets reacting to Germany's proposed €500bn infrastructure investment + defense spending boost? Surging Bund yields reflect growth optimism, not default concerns -- in contrast to the UK's 2022 Truss episode.

America still needs Canadian oil. Here's why And why the tariffs on Canada could plausibly lead to America doing deals with considerably more shady countries. A dive into the weird and wonderful world of heavy oil

✍️Despite being the world's biggest oil producer, America is v reliant on Canadian oil. And getting MORE reliant, not less.
So what happens when tariffs get imposed on Canada?
The answers are quite unsettling, for the American people... and for everyone else edconway.substack.com/p/america-st...

Text-based demand indicators for energy, metals, agricultural commodities and livestock share a common component that strongly correlates with the business cycle, consistent with inflationary, aggregate demand dynamics. More work coming out soon, stay tuned! 13/n