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A dynamic factor model for commodity prices / by Doga Bilgin and Reinhard Ellwanger.FB3-7/2017-12E-PDF

"In this note, we present the Commodities Factor Model (CFM), a dynamic factor model for a large cross-section of energy and non-energy commodity prices. The model decomposes price changes in commodities into a common “global” component, a “block” component confined to subgroups of economically related commodities and an idiosyncratic price shock component. Unlike with ordinary factor models, these components have meaningful economic interpretations: the global component mostly relates to global commodity demand shocks, while the idiosyncratic component mostly relates to commodity-specific supply shocks. We give several examples to show that the CFM provides plausible historical decompositions"--Abstract, p. 2.

Permanent link to this Catalogue record:
publications.gc.ca/pub?id=9.851088&sl=0

Publication information
Department/Agency
  • Bank of Canada.
TitleA dynamic factor model for commodity prices / by Doga Bilgin and Reinhard Ellwanger.
Series title
  • Staff analytical note = Note analytique du personnel, 2369-9639 ; 2017-12
Publication typeMonograph - View Master Record
Language[English]
FormatDigital text
Electronic document
Note(s)
  • Title from cover.
  • Includes bibliographical references.
  • Text in English, abstract in English and French.
Publishing information
  • Ottawa : Bank of Canada, 2017.
Author / Contributor
  • Bilgin, Doga.
  • Ellwanger, Reinhard.
Description11 p. : graphs
Catalogue number
  • FB3-7/2017-12E-PDF
Subject terms
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