Pricey commodities.(FROM THE EDITOR)(Editorial)

WITH prices for oil, nickel, tin, corn, and wheat hitting record highs in recent months--building on dramatic increases since their lows of 2000--it s time to ask just how long this boom will last and how economies will fare. Certainly, commodity producers and countries that export commodities have done well. But not everyone is happy. Commodity importers and consumers have started to feel the pinch of higher commodity prices on their purchasing power, which has led to food riots over soybean and wheat prices in Asia and Africa and corn prices in Latin America. And the media are warning of slower growth and higher inflation in the not-too-distant future.

Against this backdrop, the March 2008 issue of F&D delves into the latest commodity boom which, unlike past booms (in the 1970s, 1980s and 1990s) is taking place within the context of high global growth. In "Riding a Wave," the authors of a recent IMF study argue that, so far, the impact on growth and inflation has been limited--in fact, less than had been feared. But they warn that the impact on headline inflation might persist throughout 2008--even without further increases--and low- and middle-income countries that are net commodity importers might see weaker trade balances. What can be done? The study says policymakers should take steps to ensure the efficient functioning of market forces at the global level--such as allowing free trade in biofuels and incorporating emissions costs in the prices of all fuels--and move swiftly to protect the poorest.

Of course, these energy recommendations tie in with the global push to limit greenhouse gas emissions and develop alternative ...