Commodity prices and GDP growth

Yiqing Ge and Ke Tang

International Review of Financial Analysis, 2020, vol. 71, issue C

Abstract: This paper explores the extent to which commodity prices can predict GDP growth rates of various countries using indices of 27 commonly traded commodity futures. Commodity returns can strongly predict the next quarter's GDP growth, while the basis shows a reasonable level of predictive power. Overall, commodity prices can be considered a leading indicator of economic growth; increasing commodity prices and basis values indicate a stronger future economy.

Keywords: GDP growth; Commodity prices; Basis; Predictability (search for similar items in EconPapers)
JEL-codes: E23 E27 F43 G13 (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (18)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finana:v:71:y:2020:i:c:s1057521920301563

DOI: 10.1016/j.irfa.2020.101512

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