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Measuring trade rule uncertainty and its impacts on the commodity market

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  • Zhao, Xinwei
  • Mi, Xianhua
  • Ma, Chaoqun
  • Peng, Geng

Abstract

A measurement of global trade rule uncertainty (TRU) is developed by performing textual data mining on global media reports and trade remedy cases. Spikes in TRU are connected with major events that result in uncertainty in trade rules. The empirical results reveal that TRU has instantaneous effect to energy and agricultural prices, a delayed effect on nonferrous and metal prices, a continuous effect on sugar prices in Chinese commodity markets, and no significant impacts on US commodities. Our work not only contributes to extending measurements of uncertainty but also can help quantify the impacts of uncertainty on the real economy.

Suggested Citation

  • Zhao, Xinwei & Mi, Xianhua & Ma, Chaoqun & Peng, Geng, 2023. "Measuring trade rule uncertainty and its impacts on the commodity market," Finance Research Letters, Elsevier, vol. 52(C).
    • Handle: RePEc:eee:finlet:v:52:y:2023:i:c:s154461232200561x
    DOI: 10.1016/j.frl.2022.103384
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    References listed on IDEAS

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    Cited by:

    1. Li, Houjian & Huang, Xinya & Guo, Lili, 2023. "Extreme risk dependence and time-varying spillover between crude oil, commodity market and inflation in China," Energy Economics, Elsevier, vol. 127(PB).
    2. Xinwei Zhao & Xinsong Yang & Geng Peng & Shengjie Yue, 2023. "International Trade and Carbon Emissions: Evaluating the Role of Trade Rule Uncertainty," Sustainability, MDPI, vol. 15(15), pages 1-19, July.

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