Integration and Causality in International Freight Markets: Modeling with Error Correction and Directed Acyclic Graphs.

Using directed acyclic graphs (DAGs) and error correction models, we study the dynamics of freight prices that comprise the Baltic Panamax Index (BPI), the index on which freight futures trading was based. The DAGs are used to make statements about the contemporaneous correlations between prices and...

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Publicado en:Southern Economic Journal Vol. 71; no. 1; pp. 145 - 163
Autores principales: Haigh, Michael S., Nomikos, Nikos K., Bessler, David A.
Formato: Artículo
Publicado: Wiley-Blackwell Jul2004
Materias:
Acceso en línea:Ver este registro en EBSCOhost
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        atl: Integration and Causality in International Freight Markets: Modeling with Error Correction and Directed Acyclic Graphs.
      aug:
        au:
          Haigh, Michael S.
          Nomikos, Nikos K.
          Bessler, David A.
        affil:
          U.S. Commodity Futures Trading Commission, 8010 Three Lafayette Center, 1155 21st Street, NW, Washington DC, 20581
          Community College of Rhode Island, Newport
          Faculty of Finance, Cass Business School, London EC1Y 8TZ, UK
          Department of Agricultural Economics, Texas A&M University, 349A Blocker Building, College Station, TX 77840
      su:
        Economic models
        Prices
        Freight & freightage rates
        Indexation (Economics)
        Accounting methods
        Futures
      sug:
        subj:
          Economic models
          Prices
          Freight & freightage rates
          Indexation (Economics)
          Accounting methods
          Futures
      ab: Using directed acyclic graphs (DAGs) and error correction models, we study the dynamics of freight prices that comprise the Baltic Panamax Index (BPI), the index on which freight futures trading was based. The DAGs are used to make statements about the contemporaneous correlations between prices and allow us to address the construction of the data-determined orthogonalization on contemporaneous innovation covariance, which is crucial in providing inference in innovation accounting techniques. Our results provide a source of information on price discovery and suggest that the index is not appropriately composed and weighted, which may help explain the failure of the Baltic International Freight Futures Exchange (BIFFEX) contract.
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    language: English
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