The objectives of this research projects are two-fold. The first objective is to examine determinants of commodity prices and characteristics of price movements. We found that commodity prices have become more susceptible to liquidity expansion (or liquidity squeeze) and more correlated with stock prices. Second objective is to investigate the determinants of foreign capital flows into resource-rich countries. It is revealed that the commodity price boom and foreign exchange rate flexibility promote short-term speculative capital inflows, which might aggravate the resource curse.
