Commodity market instability. Empirical techniques for analysis

The single variable techniques and variance decompositions reviewed here provide essentially descriptive information on commodity instability. The single variable measures may assist in making the distinction between 'acceptable' and 'unacceptable' variability or in characterizing some particular aspect of instability, such as the prevalence of outliers in a data series. The decompositions provide a view of the instability through the contributions of its tautological components. Insight into different facets of instability are provided by each approach; taken together, these techniques can be used to build a composite picture of the instability phenomenon. However, neither offers explanation of the casual, structural forces from which the observed instability arises.