Commodities in the long-run - more complex

David Jacks of Simon Fraser University has done a very good job of collecting long-run price series in commodities to explain the behavior of real prices across the last century and a half. He made some interesting observations on the differences in real prices. Those commodities which are in the ground are more likely to see long-term real price gains.There is a finite amount of these resources and they are not renewable. Hence, there is likely to be greater increases in price. For those commodity markets which are grown or renewable, there is more likely to be controlled prices or real price decreases based on new technology and the fact that higher prices will lead to more planting. The table shows that energy markets have generally seen price gains. Agricultural prices have shown declines. There are also long cycle differences in demand, for example, the oil age. Agriculture has been affected by the green revolution of technology.

Jacks also noted that the commodity cycle usually lasts about 15-20 years. The consensus form nay is that the commodity cycles are between 10-20 years, so his work is consistent with other cycle research.