Table 9.

Description of the variables

Variables	Mnemonic	Description	Source
Dependent variable
Fiscal balance (per cent of GDP)	${\mathit{FB}}_{i,t}$	Primary net lending/borrowing is net lending ( +)/borrowing (–) plus net interest payable/paid	WEO, IMF
Independent variables
Commodity prices Index	${\mathit{CP}}_{i,t}$	All commodity price index using 2016 = 100 includes both fuel and non-fuel price indices	IMF
Individual commodities prices
Crude oil		Crude oil, US, West Texas Intermediate (WTI)	IMF
Soybean		Soybeans, US Gulf Yellow Soybean, CIF Rotterdam	IMF
Iron ore		Iron ore (any origin) fines, spot price, c.f.r. China 62% Fe	IMF
Maize		Maize (US), no. 2, yellow, f.o.b. US Gulf ports	IMF
Gold		Gold (UK), 99.5% fine, London afternoon fixing, average of daily rates	IMF
Copper		Copper (LME), grade A, minimum 99.9% purity, cathodes and wire bar shapes, settlement price	IMF
Aluminium		Aluminium (LME) London Metal Exchange, unalloyed primary ingots, minimum 99.7% purity	IMF
Silver		Silver (UK), 99.9% refined, London afternoon fixing	IMF
Gas		Natural gas index (Laspeyres), average of Europe, US, and Japan (LNG)	IMF
Commodity price volatility	${\mathit{CPV}}_{i,t}$	Use standard deviation to estimate volatility of commodity prices index and individual commodities	Author’s calculation
Gross capital formation (annual growth)	${\mathit{CAP}}_{i,t}$	Annual growth rate of gross capital formation based on constant 2010 US Gross capital formation consists of outlays on additions to the fixed assets of the economy plus net changes in the level of inventories	WDI, WB
Military expenditure (per cent of GDP)	${\mathit{MI}}_{i,t}$	Military expenditures data from SIPRI are derived from the NATO definition, which includes all expenses	WDI, WB
Real interest rate (per cent)	${\mathit{RIR}}_{i,t}$	Real interest rate is the lending interest rate adjusted for inflation as measured by the GDP deflator	WDI, WB
Individual commodities
crude oil, still, iron ore, soybean, maize, gold, copper, silver, aluminium and gas		All commodity price index using 2016 = 100	Commodity data portal, IMF

We use percentage change to obtain the data in stationary in commodity prices series and expressed as $PC{\mathit{CP}}_{i,t}$ in Eq. 1.