Commodity Prices and the US Business Cycle

Round 1

Reviewer 1 Report

The author makes a necessary effort to go deep into understanding macroeconomic cyclicality in the context of the US economy and commodity prices. The paper could shed light on some policy recommendations. Nevertheless, it is not exempt from minor comments. 

1. I understood the use of rainfall patterns thanks to the introduction, not while reading the abstract. It would be good to polish the abstract to include this type of thing (and exclude more about the implications, which could be clearer). Also, mention the periods analyzed in the introduction or abstract.

2. You miss the chance to understand the drivers of this synchronization (e.g., how much of the downward cyclicality/trend component is driven by only macroeconomic issues, which may be tricky due to endogeneity problems).

3. There are some typos and inconsistencies. For example, in line 259, there seems to be an inconsistency in writing "four" base metals before indicating three, while Table 1 shows only two. Also, please check all Figures in the Precious metals section (e.g., Figure 13b says "gold" in its title but apparently is "silver"). Please follow a careful proofread.

4. The introduction seems forcibly cut at the end. Is it possible to add more about your methodology and findings? Can you add more references using this methodology in macroeconomic topics? It would be beneficial to clearly expose the contributions of this paper in the introduction (First, Second, Third...).

5. line 273. Avoid to put "American" economic activity. It is better to use "US" economic activity. 

6. In the conclusion, you mention cointegration. Still, it seems you reached that conclusion visually rather than with specific econometric tests (e.g., using trend/cycle components to check long-run relationships in VEC models). Is there any robustness check to indicate this that is not presented in the current version of the paper?

There are some typos and inconsistencies. For example, in line 259, there seems to be an inconsistency in writing "four" base metals before indicating three, while Table 1 shows only two. Also, please check all Figures in the Precious metals section (e.g., Figure 13b says "gold" in its title but apparently is "silver"). Please follow a careful proofread.

Author Response

Our response to reviewer one is in the attached document.

Author Response File: Author Response.pdf

Reviewer 2 Report

This paper addresses a relevant and interdisciplinary topic - the relationship between commodity price cycles and the US business cycle. Understanding these dynamics is crucial as they impact various economic aspects. The main idea is an interdisciplinary approach by combining Fourier analysis with historical rainfall patterns, offering a unique perspective on the subject matter. However, I have some concerns:
-Ensure consistent use of verb tenses throughout the text. For instance, use the past tense when referring to past research and the present tense when discussing current research objectives.
-Some passive voice constructions make sentences less direct. Consider using active voice for greater clarity and directness.
-Consider using headings and subheadings to segment the introduction into distinct sections, making it easier for readers to navigate.
-In the section 2, some sentences seem incomplete or lack clarity. For instance, "This is attained via the discrete version of the Fourier transform." This could be expanded to explain what the discrete Fourier transform is. 

-Lack of evidences: There is no evidence of Fourier Transform could be a useful tool in the finance context. Please, present this stimulus to the reader.

-When discussing constraints, such as "there are 512 months (29) between July 1980 to February 2023," it's unclear what "29" represents. Clarify this notation.

-Review sentences for grammatical errors and awkward phrasing. For example, "Empirical mode decomposition (EMD) and first-differences or the logarithm of the data" could be clarified for better readability.

-Remember that the methodology section should be clear and detailed enough for someone to replicate your research, so clarity and precision are essential.

-All Figs (b) are inconsistent. They have no data in the x-axis and y-scale is not reflected in the bars. Some information is wrong and should be adjusted.

-While the findings presented in the study are indeed intriguing, it would greatly enhance the robustness of the research to include a comparison of prediction quality metrics such as Mean Absolute Percentage Error (MAPE), Mean Absolute Error (MAE), Root Mean Square Error (RMSE), and others if applicable. These metrics can offer valuable insights into the accuracy and reliability of the predictive models employed in the study. Furthermore, it would be beneficial to assess and report any improvements observed in prediction quality when compared to baseline or existing models. This would help the reader better understand the practical significance of the findings and the potential contributions of the research to the field. Incorporating such comparative analysis and reporting on the improvement, if any, in prediction quality would further strengthen the study and its relevance.

Author Response

Our response to reviewer one is in the attached document.

Author Response File: Author Response.pdf

Reviewer 3 Report

I commend the authors for the balanced and thoughtful composition of the work. However, for further improvement, I suggest some modifications.

The introduction is well-structured, with relevant literary citations that justify the chosen methodology. Nevertheless, I believe the introduction could be made more succinct. One recommendation would be to divide this section into two: one for the introduction and another for the literature review. This would enhance readability and allow for a clearer presentation of the study's relevance, contributions, and implications. Furthermore, it would be beneficial if the overall structure of the work were outlined within the introduction. The subsequent chapter could delve into prior studies that support the selected methodology and discuss findings from similar research.

Regarding the methodology, it is fitting for the research's scope and has been aptly implemented. The details and execution align with expectations.

For the conclusions, I advise addressing the study's limitations and proposing avenues for future research.

Concerning the bibliography, I observed that only about 31% of the references are from the past five years. Incorporating more recent literature would provide a more contemporary perspective and enrich the work.

Author Response

Our response to reviewer one is in the attached document.

Author Response File: Author Response.pdf