oil prices breaks and trends abstract this paper contributes to the literature of the stationarity of financial time series and the literature on oil and macroeconomics in several ways first it uses kejriwal and perron 2010 sequential procedure to endogenously determine multiple structural changes in real oil prices without facing the circular testing problem between structural changes and stationary assumptions of previous tests second it performs a diagnostic check to detect the significance and magnitude of the potential breaks third it uses the above information to test for the existence of stochastic trends in real oil prices and fourth it speculates about possible explanations for the break dates found in order to encourage further work and discussions the exercise uses monthly data from january 1861 to august 2011

interest rates and money in the measurement of monetary policy over the last 25 years a set of influential studies has placed interest rates at the heart of analyses that interpret and evaluate monetary policies in light of this work the federal reserve s recent policy of quantitative easing with its goal of affecting the supply of liquid assets appears to be a radical break from standard practice alternatively one could posit that the monetary aggregates when measured properly never lost their ability to explain aggregate fluctuations and for this reason represent an important omission from standard models and policy discussions in this context the new policy initiatives can be characterized simply as conventional attempts to increase money growth this view is supported by evidence that superlative divisia measures of money often help in forecasting movements in key macroeconomic variables moreover the statistical fit of a structural vector autoregression deteriorates significantly if such measures of money are excluded when identifying monetary

the inflation tax in a real business cycle model money is incorporated into a real business cycle model using a cash in advance constraint the model economy is used to analyze whether the business cycle is different in high inflation and low inflation economies and to analyze the impact of variability in the growth rate of money in addition the welfare cost of the inflation tax is measured and the steady state properties of high and low inflation economies are compared

limited commitment and the demand for money understanding money demand is important for our comprehension of macroeconomics and monetary policy its instability has made this a challenge common explications for the instability are financial regulations and financial innovations that shift the money demand function we provide a complementary view by showing that a model where borrowers have limited commitment can significantly improve the fit between the theoretical money demand function and the data limited commitment can also explain why the ratio of credit to m1 is currently so low despite that nominal interest rates are at their lowest recorded levels this article is protected by copyright all rights reserved

natural resource prices will they ever turn up abstract natural resource theory predicts that natural resource rents should increase over time however technical progress in resource extraction environmental constraints or great natural abundance could result in stagnant or declining product prices thus there is no theoretical reason to believe that product prices will rise in the near future the prediction of product prices by time series methods is shown to depend critically upon whether the series are modeled as difference or trend stationary dickey fuller and lagrange multiplier tests are used to show that the series are difference stationary long and short sample series are tested trend stationary modeling strongly predicts rising resource prices the result from difference stationary modeling is that there is only a weak supposition that natural resource prices will rise

conditional convergence in australia s energy consumption at the sector level abstract we examine the convergence of energy consumption per capita at the sector level in australia over the period 1973 74 to 2013 14 to do so we employ recently developed lm and rals lm unit root tests that accommodate up to two endogenously determined structural breaks we find support for energy consumption per capita convergence for six of seven sectors in australia

ethanol demand under the flex fuel technology regime in brazil abstract this paper analyzes the characteristics of ethanol demand in the context of fuel mix diversification in brazil currently ethanol is the most important gasoline additive and alternative fuel consumed in brazil and is responsible there for profound changes in the dynamics of fuel consumption the diffusion of flex fuel vehicles in brazil symbolizes a new stage of ethanol expansion and is a central component of the increasing demand for fuel accordingly we evaluate ethanol demand in brazil following the introduction of flex fuel vehicles using a cointegration approach and autoregressive distributed lag bounds tests over the period 2003 2010 the evidences confirm that during the last decade ethanol has strengthened its position as both an independent fuel and a substitute for gasoline there is also evidence that growth in the brazilian automobile fleet based on flex fuel technology is a major driving factor of long run ethanol demand further the dynamics of gasohol mandatory blend of gasoline and ethanol and ethanol prices operate in a symmetric manner over ethanol demand thereby evidencing the increasing substitutability between these alternative fuels

measurement matters recent results from monetary economics reexamined inferences about the effects of money on economic activity may depend importantly on the choice of a monetary index because simple sum aggregates cannot internalize pure substitution effects this hypothesis is investigated by replicating five recent studies that have challenged an aspect of the conventional wisdom about the effects of money on aggregate activity in four of the five cases the qualitative inference in the original study is reversed when a simple sum monetary aggregate is replaced by a divisia index of the same asset collection the results are mixed in the fifth case

monetary aggregates and output series title working paper frb title monetary aggregates and output date publication federal reserve bank of cleveland working paper no 9813 author s scott freeman finn kydland type working paper frb topics s us economy

interfuel competition in the industrial sector of seven oecd countries abstract the purpose of this article is to present an analysis of interfuel substitution in the industrial sector of seven major oecd countries the united states canada japan germany france the united kingdom and italy over the 1960 1993 period translog models are used to provide estimates of price elasticities from annual data for each country results outline the weakness of price elasticities and changes in behaviour over the last 35 years and show evidence of asymmetric effects since the collapse of oil prices in 1986 substitution has stopped industrial energy demand and oil consumption have stagnated interfuel substitution is widely induced by events other than relative price changes energy policy political and institutional constraints changes in economic activity characteristics within individual country sectors

a dynamic analysis of interfuel substitution in u s industrial energy demand using data for 1960 92 to analyze interfuel substitution in the u s industrial sector a dynamic linear logit model is shown to provide superior global properties than a comparable dynamic translog model confirming earlier static results by t j considine 1989 the linear logit model provides a direct unbiased estimate of the rate of dynamic adjustment indicating a median response lag of less than two years excluding fuels used for nonenergy purposes yields larger estimates of the price elasticities for coal and oil and indicates generally greater potential for interfuel substitution than when using aggregate data

exploring the drivers side of the blend wall u s consumer preferences for ethanol blend fuels abstract analysis of stated preferences from over 2300 u s respondents shows that general attitudes nationwide favor the use of ethanol as a motor fuel but a sizeable segment 20 indicated strong unwillingness to buy ethanol blend fuels results from a discrete choice experiment analyzed using mixed logit regressions show that all else constant price per gallon and miles per gallon dominated preferences for fuel attributes but ethanol content made the average consumer more likely to choose a blend fuel findings provide strong evidence of heterogeneity in preferences driven by attitudes but also affected by age and income at a point of price per mile equivalence for ethanol and gasoline in a market where gasoline e20 and e85 were available with no regulatory supply or technological constraints e85 would dominate market share in this case ethanol would account for 56 of volume of motor fuels consumed our results show a high level of consumer substitutability of gasoline with ethanol and willingness to choose high ethanol blend fuels which could help expand ethanol use beyond the current regulatory and technological limits of the blend wall

oil and the macroeconomy since world war ii all but one of the u s recessions since world war ii have been preceded typically with a lag of around three fourths of a year by a dramatic increase in the price of crude petroleum this does not mean that oil shocks caused these recessions evidence is presented however that even over the period 1948 72 this correlation is statistically significant and nonspurious supporting the proposition that oil shocks were a contributing factor in at least some of the u s recessions prior to 1972 by extension energy price increases may account for much of post opec macroeconomic performance

implementation of biofuels in malaysian transportation sector towards sustainable development a case study of international cooperation between malaysia and japan abstract modern transportation nowadays has evolved into an important economic activity for human civilisation even though various alternative energy solutions have been put forward to reduce the dependency on fossil fuels biofuels remain one of the few options which are capable of replacing the roles of fossil fuels in transportation sector without suffering from major economic losses malaysia with a huge supply of palm oil for biofuels production is intended to implement mandatory biodiesel blends in its transportation sector in 2011 in order to achieve its carbon reduction commitment towards a more sustainable development this implementation was originally targeted to start in 2009 but had to be postponed due to several obstacles such as expensive cost lack of sufficient infrastructure and low public demand on the other hand japan is also trying to fulfil its carbon reduction obligation as outlined under kyoto protocol with the usage of biofuels to replace fossil fuels in the transportation sector however it lacks sufficient biofuels supply to support its high transportation energy demand in this case study the mutual cooperation between malaysia and japan in the implementation of biofuels in transportation sector will be studied and analysed in order to overcome the challenges presented in both countries it is hope to ascertain potential cooperation opportunities amongst those two countries to promote biofuels energy as malaysia is rich in natural resources whilst japan has the relevant expertise and technology it is believed that the strengths from one country can help to cover for the weaknesses from the other and vice versa via closer bilateral partnership which will be extremely crucial when dealing with global energy issues ultimately it is hope that this case study will enable both malaysian and japanese government to achieve their renewable energy target in domestic transportation sector

applied econometrics and implications for energy economics research abstract developments in applied econometrics particularly with regard to unit root tests and cointegration tests have motivated a rich empirical literature on energy economics over the last decade this study reviews recent developments in time series econometrics applications in the energy economics literature we first consider the literature on the integration properties of energy variables we begin with a discussion of the implications of whether energy variables contain a unit root and proceed to examine how results differ according to the specific unit root or stationarity test employed we then proceed to examine recent developments in the literature on cointegration granger causality and long run estimates between disaggregated energy consumption and economic growth we review both single country and panel studies and pay particular attention to studies which have expanded the literature through adding variables such as financial development and trade in addition to energy consumption to the augmented production function as well as studies which have extended the literature through examining disaggregated energy consumption by type in each case we highlight best practice in the literature point to limitations in the literature including econometric modeling challenges and suggest recommendations for future research a key message of our survey is that the profession needs to guard against overload of research in these areas as most applied studies are no longer adding anything more to what is already known

the future of uk final user energy demand anticipation of final user energy demand is central to suppliers and policy makers plans recent developments in dynamic econometrics such as the cointegration approach have enabled energy modellers to study long run relationships between demand and its determinants principally economic activity and real prices the purpose of this paper is to present the seecem output elasticity estimates and forecasts using the cointegration approach as well as the methodology and analysis underlying them as economic activity is expected to grow in all but the iron and steel sector the long run relationships indicate that most sectors will increase overall fuel use up to the year 2000 despite weak but potentially volatile world oil prices and given stable environmental policies average real oil prices should remain broadly constant except in the transport sector economic activity elasticities and increased competition in supply industries imply that natural gas and electricity are likely to take an increasing share of final user requirements at the expense of petroleum products and coal this gradual and continued shift towards cleaner fuels is likely to ameliorate adverse environmental consequences resulting from the overall growth in final user fuel demand

some evidence on the continuity of the growth process among the g7 countries david h papell the stability of the growth process whether growth rates are rising falling or constant is one of the central questions of economic growth theory we use recently developed techniques for identifying structural change in economic time series and find evidence of multiple breaks in per capita real gdp of the g7 countries over the past 120 years once determined these breaks are used to delineate time periods although there is some evidence of individual periods of slowdowns the overall tendency appears to be one of increasing steady state growth over the long run jel 05 01 c22 i introduction this article examines the growth process of each of the group of seven g7 countries between 1870 and 1989 the question that lies at the heart of the analysis that follows centers on the stability of the growth process specifically a are there distinct periods of development for each country b in the event that there are distinct periods when did one period of development end and the next begin c what evidence do we have regarding growth rates over the long run are these steady as solow 1956 and kaldor 119611 proposed are they falling as malthus believed that they eventually would or are they increasing as romer 19861 and others have recently suggested one of the interesting and related questions that this analysis raises is the issue of the postwar slowdowns among the g7 how prevalent and how severe were these slowdowns when did they begin and how do the postslowdown growth rates compare to earlier periods when examined from the longrun perspective of 120 years one of the goals of this article is to provide a precise characterization of takeoffs and slowdowns this is done by sequentially determining the timing of breaks in the trend process for per capita real gdp and estimating changes in the coefficients once a break has been identified and determined to be statistically significant takeoffs and slowdowns are defined by changes in the slope coefficient of the trend function the trend breaks are determined in the next section we find evidence of two breaks for canada japan the united kingdom and the united states three breaks for germany four breaks for italy and five breaks for france a number of the breaks associated with the world wars and the great depression follow a pattern of an initial drop in the level of output followed by an increase in the growth rate only two countries france and japan display evidence of a postwar growth slowdown the third section examines the growth implications of these results although no two countries are identical the estimated break dates partition the past 120 years into eight distinct time periods for the g7 countries as a whole the long run tendency is one of increasing steady state growth comparing the first to the last period steady state growth rates increased for all seven countries and on average almost doubled the major events of the last century had both common and idiosyncratic effects on the countries world war ii affected the continental european countries much differently than the others and the great depression was significant only for canada and the united states section iv concludes ii trend breaks it is possible to think of log per capita output y sub t as being the sum of a deterministic component td sub t and a stochastic component z sub t 1 y sub t td sub t z sub t where the deterministic component td sub t is linear in time t 2 td sub t mu beta t as shown below a takeoff is associated with an increase in beta whereas a slowdown is associated with a decrease in beta we define takeoffs and slowdowns as changes in beta associated with statistically significant breaks in the deterministic component td sub t of per capita output

consumer electricity and gas prices across australian capital cities structural breaks effects of policy reforms and interstate differences abstract we detect and analyze the most significant structural changes in the quarterly growth rate of consumer electricity and gas prices in australia and estimate their corresponding seasonal effects to do so we apply the general modelling framework of the bai perron breaking regression to all available quarterly data for capital cities individually and australia as a whole 1989q3 2017q2 retail energy prices in most australian states were deregulated in the 2000s we find that increases in average quarterly growth rates of electricity and gas prices consistently occurred in the third september quarter and find very few instances of increases in any other quarters of the year in the post deregulation period price increases are significantly higher than in the pre deregulation era results for some capital cities are stark in perth third quarter growth in electricity prices has been five times higher after the structural break in australia as a whole third quarter growth in gas prices has been three times higher after the structural break we discuss several possible explanations for energy price rises in the period since deregulation

the seven sisters versus opec solving the mystery of the petroleum market structure abstract this paper provides an explanation of the changing behavior of the crude oil market and tests it using the u s data from january 1913 to september 2014 we claim that the crude oil market has experienced two important structural breaks in its industrial organization the first occurred when venezuela and the arab crude oil exporting countries forced the so called seven sisters to sign the fifty fifty profit sharing agreements the second occurred after opec succeeded in cracking the secrets of the international crude oil marketing and in undertaking the wave of nationalizations of the 1970s

liberalisation consumption heterogeneity and the dynamics of energy prices in this study the methodology var and the cointegration analysis are used to examine the dynamic interaction among the energy prices of the competitor energy sources in a liberalised market data from the uk market were applied and models for the residential and industrial sectors were developed our results indicate the existence of long run relationships between the energy prices before and after the liberalisation implying the possibility of substitution among the different forms of energy however the results appear to be also largely influenced by external variables not included in the models that may be reducing the importance of the energy prices over their own evolution and offsetting the basic substitution relationships the general results of the impulse response functions both for the residential and industrial sectors present low statistical significance which seems to be due to the still slow rate of adjustment of the energy market to price changes along with the immaturity of the liberalisation process taking into consideration the results some routes for future research are pointed out namely the need to include in the analysis variables which would proxy the general state of the economy

breaks trends and unit roots in spot prices for crude oil and petroleum products abstract this study examines the trend properties in energy price series using weekly spot price data for crude oil heating oil and regular gasoline in particular the procedures proposed by perron and yabu 2009b are employed to test for a one time break in the trend function of each price series with no prior knowledge of whether the noise component is stationary or has an autoregressive unit root based on the results of the break estimate the unit root test developed by kim and perron 2009 is performed to examine the stationarity of the prices finally we extend the one break analysis to the case with multiple breaks by employing the break test proposed by kejriwal and perron 2010 and the unit root test of carrion i silvestre et al 2009 the results consistently demonstrate evidence of structural breaks and reject the unit root null hypothesis for all the price series suggesting that energy prices are persistently influenced by long term economic fundamentals instead of temporal policy changes

the impact of energy prices on the volatility of ethanol prices and the role of gasoline emissions abstract the contribution of renewable energy resources is vital for a country s economic growth by providing high efficiency in energy as well as an effective tool for the confrontation of climate change in particular concerning the eu an increase in the consumption of renewable energy resources as a proportion of the total energy consumption by its member states was set as an objective until 2020 ethanol has been widely used as a substitute to conventional energy like gasoline and oil the present paper surveys the role of alternative energy prices and gas emissions in the formation of the ethanol prices the results of the empirical survey confirmed the existence of a sole relationship among the variables employed according to the results obtained an increase in the volume of emissions or in gasoline prices results in an increase in ethanol prices while the opposite is confirmed in the case of crude oil he elasticity of ethanol prices to the increase of the emissions is another result worth mentioning indicative of the significant role of the emissions in the formation of ethanol prices

the own price of money and a new channel of monetary transmission traditionally the effects of monetary policy actions on output are thought to be transmitted via monetary or credit channels real business cycle theory by contrast highlights the role of real price changes as a source of revisions in spending and production decisions motivated by the desire to focus on the effects of price changes in the monetary transmission mechanism this paper incorporates a direct measure of the real own price of money into an estimated vector autoregression and a calibrated real business cycle model consistent with the rbc view of the monetary transmission mechanism both approaches reveal that movements in the own price of money are strongly related to movements in output

a pooled dynamic analysis of interfuel substitution in industrial energy demand by the g 7 countries a dynamic version of considine s 1990 linear logit model is used to obtain theoretically consistent estimates of long run price elasticities from pooled intercountry data on industrial energy consumption this model also provides a rare direct estimate of the important rate of dynamic adjustment revealing a median lag of ten years the long run demands for oil and coal are the most elastic and the strongest channels for interfuel substitution are between oil and natural gas with no significant evidence of complementarity between fuels

consumer choice between ethanol and gasoline lessons from brazil and sweden the introduction of flex fuel vehicles since 2003 has made possible for brazilian drivers to choose between high ethanol blends or gasoline depending on relative prices and fuel economies in sweden flex fuel fleets were introduced in 2005 prices and demand data were examined for both brazil and sweden bioethanol has been generally the most cost efficient fuel in brazil but not for all states in any case consumers in brazil have opted for ethanol even when this was not the optimal economic choice in sweden a different behavior was observed when falling gasoline prices made e85 uneconomical in late 2008 in a context of international biofuels expansion the example of e85 in sweden indicates that new markets could experience different consumer behavior than brazil demand falls rapidly with reduced price differences between ethanol and gasoline at the same time rising ethanol demand and lack of an international market with multiple biofuel producers could lead to higher domestic prices in brazil once the limit curve is crossed the consumer might react by shifting back to the usage of gasoline

simulation for assessing the liberalization of biofuels abstract global biofuel consumption has been growing in recent years as different countries worldwide have been exploring alternatives and complements to gasoline and diesel fuel for transport this is due to a hike in oil prices and their increasing volatility as well as both a high dependence of the transport sector on oil and also because arguably the supply chain of biofuels emits less co2 than that of fossil fuels biofuels have been available around the world for a while with the aid of some government support brazil pioneered this renewable solution for transport from the early 1930s as the country had little access to local fuels while oil and other alternatives became more expensive biofuels are currently widely considered as part of the solution to affordable fuels for transport this paper makes use of a system dynamics model to analyse the current leading policies aiming at increasing the penetration of biofuels in this context and given multiple uncertainties that include technology evolution and fuel prices scenario analysis has been considered for the examination of different extreme though plausible futures simulations under extreme scenarios helped in assessing the possibility of removing incentives that is leaving decisions to an open market and a partial reduction of subsidies this paper concludes that for the case of colombia the potential of biofuels seems promising

energy consumption employment output and temporal causality evidence from taiwan based on cointegration and error correction modelling techniques in this study a cointegration analysis and a vector autoregressive model var are used to examine the causal relationships among energy consumption employment and output for taiwan over the period january 1982 to november 1997 johansen 1988 and johansen and juselius 1990 cointegration test result indicates these three variables are cointegrated with one cointegrating vector the results from granger causality tests based on vector error correction models vecm suggest bidirectional grange causality for employment output and employment energy consumption but only unidirectional causality running from energy consumption to output furthermore the impulse responses and variance decompositions are also incorporated into the analysis the results from impulsive response and variance decomposition analysis tell similar stories energy consumption appears to have led to output growth in taiwan over this period the policy implication of this finding is that energy conservation will restrain the outpu

dynamic factor demands and the effects of energy price shocks a dynamic model is used to understand how sharp changes in energy prices affect investment behavior employment and energy use the authors discuss the theory behind their model selection model specifications estimation methods and data list parameter estimates and elasticities for the selected model and describe the simulations they conclude that 1 the data strongly reject the hypothesis of constant returns to scale within their specification of aggregate production 2 the data indicate adjustment costs on labor are small and 3 their results help reconcile some of the conflicting estimates of energy demand elasticities appearing in recent literature 23 references 3 figures 3 tables

structural breaks in international tourism demand are they caused by crises or disasters it is recognised that the tourism industry is vulnerable to some form of crises or disaster however despite the attention given to the nature and consequences of tourism crises and disasters there is a gap in the literature regarding the ex post detection of these events in this article we estimate both the number and date of structural breaks in international tourism arrival series for 25 countries and madeira island using the bai and perron 1998 structural break test we compare the date of tourism crises and disasters to the dating of these structural breaks we observe that tourism crises and disasters are largely consistent with the dates of breaks therefore this method allows us to solve a gap in the tourism industry related to the correct allocation of negative shocks in international tourism arrival demand to crisis or disaster phenomena

flex fuel vehicle adoption and dynamics of ethanol prices lessons from brazil abstract focusing on dynamics of the relative prices of substitute fuels namely ethanol and gasoline this study quantifies the impact of the increase in shares of flex fuel vehicles ffvs in the vehicle fleet on the domestic ethanol prices in brazil a modified partial adjustment model is employed estimation results provide strong support for our research hypotheses i when consumers can choose between the fuels the relative ethanol and gasoline prices converge to a long run equilibrium level which is determined by the fuel economy and ii price dynamics are largely determined by market supply and demand factors including the price of sugar ethanol exports and composition of vehicle fleet furthermore the impacts of demand factors such as ethanol exports are strengthened by the increasing proportion of ffvs in the vehicle fleet

do oil spot and futures prices move together abstract this paper investigates the time varying correlation and the causal relationship between crude oil spot and futures prices using a newly developed approach wavelet coherency analysis in time frequency domain first we find evidence of a long run cointegration relationship between oil spot and futures prices moreover the short run causality is more significant in shorter maturity pairs versus longer maturity pairs in the vector error correction framework second the results from wavelet coherency analysis show significant dynamic correlations between variables in the time frequency domain third the illustration of the phase difference series around zero suggests that spot and futures prices contribute to the dynamics of the long run equilibrium fourth and finally we provide reasons for the structural changes in oil prices and also recommend investment strategies corresponding to risk diversification future studies focusing on the behavior of oil prices should consider the characteristics of the time frequency space and lead lag dynamic relationships

issues of social acceptance on biofuel development alongside with biofuel development social acceptance issues have been underestimated while social acceptance can emerge as powerful barrier for biofuel development this article provides discussion on social acceptance in biofuel context an acceptance framework based on life cycle biofuel production had been referred for a better understanding on social acceptance issues malaysia has been referred for the discussion as the country has faced with acceptance issue in their biofuel program the discussion point out different societal groups will demand specific consideration for either support or oppose biofuel this paper concludes that biofuel development will be constraint if social acceptance issues remain neglect

unit root properties of crude oil spot and futures prices in this article we examine whether wti and brent crude oil spot and futures prices at 1 3 and 6 months to maturity contain a unit root with one and two structural breaks employing weekly data over the period 1991 2004 to realise this objective we employ lagrange multiplier lm unit root tests with one and two endogenous structural breaks proposed by lee and strazicich 2003 minimum lagrange multiplier unit root test with two structural breaks review of economics and statistics 85 1082 1089 2004 minimum lm unit root test with one structural break working paper no 04 17 department of economics appalachian state university we find that each of the oil price series can be characterised as a random walk process and that the endogenous structural breaks are significant and meaningful in terms of events that have impacted on world oil markets

an economic analysis of transportation fuel policies in brazil fuel choice land use and environmental impacts brazil uses taxes subsidies and blending mandates as policy instruments to manage and stabilize its transportation fuel markets the fuel sector has been very dynamic in recent years due to frequent policy adjustments and variable market conditions in this paper we use a price endogenous economic simulation model to analyze the impacts of such policy adjustments under various challenging conditions in the global ethanol and sugar markets our analysis specifically focuses on brazilian producers supply responses consumers driving demand and fuel choice ethanol trade land use greenhouse gas emissions and social welfare the model results show that i under a low ethanol blending rate conventional vehicles would be driven significantly less while flex fuel and ethanol dedicated vehicles would not be affected significantly ii lowering the fuel taxes adversely affects the competitiveness of sugarcane ethanol against gasoline blends thus lowering producers surplus and iii while a reduction in fuel taxes is advantageous in terms of overall social welfare it has serious environmental impacts by increasing the ghg emissions from transportation fuels consumed in brazil

non renewable resource prices deterministic or stochastic trends in this paper we examine temporal properties of 11 natural resource real price series from 1870 to 1990 recent studies by ahrens and sharma trends in natural resource commodity prices deterministic or stochastic j environ econom manage 33 1997 59 74 berck and roberts natural resource prices will they ever turn up j environ econom manage 31 1996 65 78 and slade grade selection under uncertainty least cost last and other anomalies j environ econom manage 15 1988 189 205 among others find that many non renewable resource prices have a stochastic trend we revisit this issue by employing a lagrangian multiplier unit root test that allows for two endogenously determined structural breaks with and without a quadratic trend contrary to previous research we find evidence against the unit root hypothesis for all price series our findings support characterizing natural resource prices as stationary around deterministic trends with structural breaks we additionally show that both pre testing for unit roots with breaks and allowing for breaks in the forecast model can improve forecast accuracy overall the results in this paper are important in both a positive and normative sense without an appropriate understanding of the dynamics of a time series empirical verification of theories forecasting and proper inference are potentially fruitless