Does the Baltic Dry Index drive volatility spillovers in the commodities, currency, or stock markets?

This study examines the spillover effect of the Baltic Dry Index (BDI) on the commodities futures, currency, and stock markets by using a tri-variate VAR-BEKK-GARCH-X model on a dataset from October 1, 2007 to October 31, 2018. Results reveal that the BDI spillover effect is time-varying. The spillover effect of the BDI was insignificant during the whole sample period but significant during the 2008/2009 global financial tsunami, and its influence increased during the 2014–2016 economic slowdown in China. The BDI serves as a short-term rather than long-term indicator for the commodities, currency, and equity markets, especially during financial crises.

Language

  • English

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Filing Info

  • Accession Number: 01709712
  • Record Type: Publication
  • Files: TRIS
  • Created Date: Jul 1 2019 9:20AM