Download This PaperCommodity Prices and GDP Growth
33 Pages Posted: 16 Jun 2020
Date Written: May 22, 2020
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
JEL Classification: E23; E27; F43; G13
Suggested Citation: Suggested Citation
Ge, Yiqing and Tang, Ke, Commodity Prices and GDP Growth (May 22, 2020). International Review of Financial Analysis, Forthcoming, Available at SSRN: https://ssrn.com/abstract=3607744
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