The effect of monetary policy shocks on the price of selected industrial commodities in Iran by Bayesian VAR method

Monetary policy shocks are among the factors that can affect the prices of industrial goods. Therefore, determining the factors which affect price changes might come in handy for policymakers. Considering this, the purpose of this study is to investigate the effect of monetary policy shocks on the price dynamics of selected industrial commodities group in Iran using a Bayesian VAR in the period of 2008-1 to 2017-4. Due to statistical limitations, the selected industrial commodities include aluminum, copper, gold, beams and zinc. The results showed that in long-term the exchange rate had the most impact on the prices of aluminum, gold and beams; copper and zinc have had the most impact on their prices.  The least impact on all goods except beams was through the price of beams and the least impact on the price of beams was from the price of zinc.