Journal
AUSTRALIAN ECONOMIC HISTORY REVIEW
Volume 61, Issue 2, Pages 204-227Publisher
WILEY
DOI: 10.1111/aehr.12220
Keywords
dry bulk; maritime freight rates; structural vector autoregression
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Funding
- Social Sciences and Humanities Research Council of Canada
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In the long run, shipping demand shocks have a significant impact on real dry bulk freight rates, while shipping supply shocks have become less relevant over time.
We provide evidence on the dynamic effects of fuel price shocks, shipping demand shocks and shipping supply shocks on real dry bulk freight rates in the long run. We first analyse a new dataset on dry bulk freight rates for the period from 1850 to 2020, finding that they followed a downward but undulating path with a cumulative decline of 79%. Next, we turn to understanding the drivers of booms and busts in the dry bulk shipping industry, finding that shipping demand shocks strongly dominate all others as drivers of real dry bulk freight rates in the long run. Furthermore, while shipping demand shocks have increased in importance over time, shipping supply shocks in particular have become less relevant.
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