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Commodity Price Changes are Concentrated at the End of the Cycle

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  • Stephen R. Ingram

    (Business School, University of Western Australia)

Abstract

This paper introduces a new approach to the analysis of the cyclical behaviour of world commodity prices. Within booms and slumps, the behaviour of commodity prices seems to be quite similar, surprisingly even amongst different types of commodities (soft and hard), which are influenced by different shocks. The key result is that during commodity price booms, the faster growth occurs towards the end of the boom. Likewise, most of the collapse of prices occurs towards the end of slumps. This paper first establishes this behaviour as a new empirical regularity of commodity prices. Secondly, this paper introduces a novel way to conceptualise shocks to commodity prices as a cyclical occurrence, and on the basis of this newly established empirical regularity, the size of these cyclical shocks act as leading indicators of impending turnings points.

Suggested Citation

  • Stephen R. Ingram, 2014. "Commodity Price Changes are Concentrated at the End of the Cycle," Economics Discussion / Working Papers 14-20, The University of Western Australia, Department of Economics.
    • Handle: RePEc:uwa:wpaper:14-20
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    Cited by:

    1. Samet Günay, 2014. "Are the Scaling Properties of Bull and Bear Markets Identical? Evidence from Oil and Gold Markets," IJFS, MDPI, vol. 2(4), pages 1-20, October.
    2. Anu Keshiro Toriola & Emmanuel Oladapo George & Walid Gbadebo Adebosin, 2021. "The Nexus Between Commodity Terms and National Terms of Trade of Sub-Sahara African Countries: Implication for Intersectoral Linkage," South-Eastern Europe Journal of Economics, Association of Economic Universities of South and Eastern Europe and the Black Sea Region, vol. 19(1), pages 79-98.

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