The relationship between commodity prices and world trade uncertainty

This paper investigates the relationship between commodity prices and world trade uncertainty for the period of 1996Q1–2019Q3. World Trade Uncertainty Index (WTU), developed by Ahir et. al. (2018), and Commodity Price Index for the United States of America (USA) have been used in the analyses. For a...

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Bibliographic Details
Published in:Economic analysis and policy 2020-06, Vol.66, p.276-281
Main Authors: Karabulut, Gokhan, Bilgin, Mehmet Huseyin, Doker, Asli Cansin
Format: Article
Language:English
Subjects:
Commodity price
The USA economy
Wavelet analysis
World trade uncertainty
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Summary:This paper investigates the relationship between commodity prices and world trade uncertainty for the period of 1996Q1–2019Q3. World Trade Uncertainty Index (WTU), developed by Ahir et. al. (2018), and Commodity Price Index for the United States of America (USA) have been used in the analyses. For analyzing this relationship Continuous Wavelet Transform (CWT), Wavelet Coherency (WTC), and Wavelet Power Spectrum (WPS) techniques have been applied in the paper. Results indicate that there are strong noises for WTU between 2009–2010 and 2015–2016; for CPI between 2008–2009 and 2015–2016 and between 2008–2009 and 2017–2018 with a positively correlated and significant causal prediction. •Commodity prices and world trade uncertainty relationship is analyzed.•Wavelet Coherency (WTC) technique is applied in the paper.•Results indicate that there are strong noises for WTU for certain periods.
ISSN:0313-5926
DOI:10.1016/j.eap.2020.05.001