Macroeconomic Performance During Commodity Price Booms And Busts
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Author | : Luis Felipe Céspedes |
Publisher | : |
Total Pages | : |
Release | : 2012 |
Genre | : Economics |
ISBN | : |
Download Macroeconomic Performance During Commodity Price Booms and Busts Book in PDF, Epub and Kindle
Fluctuations in commodity prices are often associated with macroeconomic volatility. But not all nations are created equal in this regard. The macro response to commodity booms and busts depends both on the structural characteristics of the economy and on the policy framework that is in place. In this paper we investigate the macro response of a group of commodity-producing nations in episodes of large commodity prices shocks. First we provide a theoretical framework to analyze how shocks to commodity prices affect the domestic economy. For this we use a simple open-economy model with nominal rigidities and financial frictions. Then we provide empirical evidence (using commodity price boom and bust episodes) that commodity price shocks have a significant impact on output and investment dynamics. Economies with more flexible exchange rate regimes exhibit less pronounced responses of output during these episodes. We also provide evidence that the impact of those shocks on investment tends to be larger for economies with less developed financial markets. Moreover, we find that international reserve accumulation, more stable political systems, and less open capital accounts tend to reduce the real exchange rate appreciation (depreciation) in episodes of commodity price booms (busts).
Author | : Luis Felipe Céspedes |
Publisher | : |
Total Pages | : |
Release | : 2012 |
Genre | : |
ISBN | : |
Download Macroeconomic Performance W18569.marc(2): During Commodity Price Booms and Busts Book in PDF, Epub and Kindle
Author | : International Monetary Fund |
Publisher | : International Monetary Fund |
Total Pages | : 36 |
Release | : 2009-09-01 |
Genre | : Business & Economics |
ISBN | : 1451873522 |
Download Commodity Terms of Trade Book in PDF, Epub and Kindle
We compile a historical dataset covering nearly 40 years of booms and busts in the commodity terms of trade of over 150 countries. We discuss the characteristics of these events and their effects on macroeconomic performance and, in particular, compare the most recent commodity-price cycle with its historical precedents.
Author | : Nikola Spatafora |
Publisher | : |
Total Pages | : 35 |
Release | : 2009 |
Genre | : Business cycles |
ISBN | : |
Download Commodity Terms of Trade :h[electronic Resource] Book in PDF, Epub and Kindle
"We compile a historical dataset covering nearly 40 years of booms and busts in the commodity terms of trade of over 150 countries. We discuss the characteristics of these events and their effects on macroeconomic performance and, in particular, compare the most recent commodity-price cycle with its historical precedents."--Abstract.
Author | : Luis Felipe Céspedes |
Publisher | : |
Total Pages | : |
Release | : 2012 |
Genre | : |
ISBN | : |
Download Macroeconomic Performance Book in PDF, Epub and Kindle
Fluctuations in commodity prices are often associated with macroeconomic volatility. But not all nations are created equal in this regard. The macro response to commodity booms and busts depends both on the structural characteristics of the economy and on the policy framework that is in place. In this paper we investigate the macro response of a group of commodity-producing nations in episodes of large commodity prices shocks. First we provide a theoretical framework to analyze how shocks to commodity prices affect the domestic economy. For this we use a simple open-economy model with nominal rigidities and financial frictions. Then we provide empirical evidence (using commodity price boom and bust episodes) that commodity price shocks have a significant impact on output and investment dynamics. Economies with more flexible exchange rate regimes exhibit less pronounced responses of output during these episodes. We also provide evidence that the impact of those shocks on investment tends to be larger for economies with less developed financial markets. Moreover, we find that international reserve accumulation, more stable political systems, and less open capital accounts tend to reduce the real exchange rate appreciation (depreciation) in episodes of commodity price booms (busts).
Author | : Gustavo Adler |
Publisher | : International Monetary Fund |
Total Pages | : 39 |
Release | : 2011-12-01 |
Genre | : Business & Economics |
ISBN | : 1463926642 |
Download Commodity Price Cycles Book in PDF, Epub and Kindle
Commodity-exporting countries have significantly benefited from the commodity price boom of recent years. At the current juncture, however, uncertain global economic prospects have raised questions about their vulnerability to a sharp fall in commodity prices and the policies that can shield it from such a shock. To address these questions, this paper takes a long term (4 decade) view at emerging markets' commodity dependence, the history of commodity price busts and the role of policies in mitigating or amplifying their economic impact. The paper highlights the stark difference in trends between Latin America - one of the most vulnerable regions given its high, and rising, commodity dependence - and emerging Asia - which has evolved from being a net exporter to a net importer of commodities in the last 40 years. We find evidence, however, that while commodity dependence is an important ingredient, a country's ultimate degree of vulnerability to commodity price shocks is to a great extent determined by the flexibility and quality of its policy framework. Policies in the run-up of sharp terms-of-trade drops - especially when those are preceded by booms - play a particularly important role. Limited exchange rate flexibility, a weak external position, and loose fiscal policy tend to amplify the negative effects of these shocks on domestic output. Financial dollarization also appears to act as a shock "amplifier."
Author | : Mr.Rabah Arezki |
Publisher | : International Monetary Fund |
Total Pages | : 35 |
Release | : 2010-04-01 |
Genre | : Business & Economics |
ISBN | : 1451982712 |
Download Boom-Bust Cycle, Asymmetrical Fiscal Response and the Dutch Disease Book in PDF, Epub and Kindle
We examine the behavior of expenditure policy during boom-bust in commodity price cycles, and its implication for real exchange rate movements. To do so, we introduce a Dutch disease model with downward rigidities in government spending to revenue shock. This model leads to a decoupling between real exchange rate and commodity price movement during busts. We test our model's theoretical predictions and underlying assumptions using panel data for 32 oil-producing countries over the period 1992 to 2009. Results are threefold. First, we find that change in current spending have a stronger impact on the change in real exchange rate compared to capital spending. Second, we find that current spending is downwardly sticky, but increases in boom time, and conversely for capital spending. Third, we find limited evidence that fiscal rules have helped reduce the degree of responsiveness of current spending during booms. In contrast, we find evidence that fiscal rules are associated with a significant reduction in capital expenditure during busts while responsiveness to boosts is more muted. This raises concerns about potential adverse consequences of this asymmetry on economic performance in oil-producing countries.
Author | : Panayotis N. Varangis |
Publisher | : World Bank Publications |
Total Pages | : 36 |
Release | : 1995 |
Genre | : Business & Economics |
ISBN | : 9780821334898 |
Download Managing Commodity Booms--and Busts Book in PDF, Epub and Kindle
Why booms happen -- Why this boom won't continue -- Managing booms and busts -- Learning from experience -- Who manages the boom? -- How to manage booms.
Author | : Mr.Markus Eberhardt |
Publisher | : International Monetary Fund |
Total Pages | : 53 |
Release | : 2018-07-06 |
Genre | : Business & Economics |
ISBN | : 1484367820 |
Download Commodity Price Movements and Banking Crises Book in PDF, Epub and Kindle
We develop an empirical model to predict banking crises in a sample of 60 low-income countries (LICs) over the 1981-2015 period. Given the recent emergence of financial sector stress associated with low commodity prices in several LICs, we assign price movements in primary commodities a key role in our model. Accounting for changes in commodity prices significantly increases the predictive power of the model. The commodity price effect is economically substantial and robust to the inclusion of a wide array of potential drivers of banking crises. We confirm that net capital inflows increase the likelihood of a crisis; however, in contrast to recent findings for advanced and emerging economies, credit growth and capital flow surges play no significant role in predicting banking crises in LICs.
Author | : Mr.Paulo A Medas |
Publisher | : International Monetary Fund |
Total Pages | : 18 |
Release | : 2016-09-27 |
Genre | : Business & Economics |
ISBN | : 147554281X |
Download How to Adjust to a Large Fall in Commodity Prices Book in PDF, Epub and Kindle
Resource-rich countries have to manage highly volatile commodity revenues. In periods of revenue booms there is a tendency for large spending scale-ups. When facing large and persistent reductions in commodity prices, some of these countries will need to adjust their budgets to the new reality. In many cases, overall surpluses turn into large fiscal deficits and borrowing costs tend to rise with the fall in commodity prices. This note discusses how to undertake large fiscal adjustments, which often tend to be protracted and with long-lasting impacts on growth. Consequently, the note also highlights how to better prepare for future booms and busts in commodity prices.