Dear Colleagues, 

Combined with the once-in-a-lifetime COVID-19 outbreak and the subsequent global economic recession, the recent geopolitical risk caused by Russia’s invasion of Ukraine has triggered spiralling commodity prices. The prices of strategic commodities such as oil, corn, and gold have been highly susceptible to the influence of intensified geopolitical risks and supply interruptions caused by the pandemic. The war between Ukraine and Russia has amplified fluctuations in commodity prices of their major exporting commodities such as oil, natural gas, wheat, and aluminium. Thus, it is very interesting from a policy and an empirical standpoint to probe to what extent these factors have influenced fluctuations in commodity prices. This Special Issue has the purpose of analyzing and providing the effects of the recession, geopolitical events, and the coronavirus pandemic on the volatility of commodity prices. We are also interested in topics regarding the impacts of the U.S.–China hegemony competition, the recent Fed rate hike, and digital (business) innovation on commodities markets. We are expecting to contribute not only to empirical research, but also to economic theory by empirically analyzing changes in various commodity markets, including primary products, foreign exchange, bonds, and stock markets.

Dr. Soojoong Nam
Prof. Dr. Jungho Baek
Guest Editors

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• geopolitical risk
• Ukrain–Russia war
• COVID-19 pandemic
• COVID-19 recession
• strategic commodities
• econometric modeling
• crude oil
• natural gas
• gold

Title: Financial Stress and Commodity Returns: A Dynamic Approach
Authors: Ramesh Adhikari; Kyle Putnam
Affiliation: School of Business, Cal Poly Humboldt, USA
Abstract: This paper examines the relationship between commodity index returns and the Office of Financial Research Financial Stress Index (OFR FSI). Utilizing the S&P GSCI and its five sub-indices (agriculture, livestock, energy, industrial metals, and precious metals), we find that the causal relationship between financial market stress and commodity returns changes over time based on the sample period examined, and the methodology employed. We note that financial stress has a negative relation with commodity returns during low commodity return states and a positive relation with commodity returns during high commodity return states. Our findings highlight the importance of considering both a time-varying framework and financial stress when analyzing commodity markets and their dynamics.