Trading on Their Terms? Commodity Exporters in the Aftermath of the Commodity Boom

Aslam, Aqib; Beidas-Strom, Samya; Bems, Rudolfs; Celasun, Oya; Çelik, Sinem Kılıç; Kóczán, Zsóka

doi:10.5089/9781498338158.001

Cited by 40 publications

(18 citation statements)

References 45 publications

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“…The sample ranges from 1999Q1 to 2019Q1 with the start date coinciding with the adoption of the macroeconomic tripod (floating exchange rate, inflation target and primary surplus target). Although it is common for SVAR papers on the Brazilian economy to begin their sample period in 1996 or before (Zeev et al, 2017), a floating currency is a shock-absorber of terms of trade shocks (Aslam et al, 2016) and represents an important break in the exchange rate data for the research question.…”

Section: Datamentioning

confidence: 99%

“…Similarly,Drechsel and Tenreyro (2018), suggest that the negative relationship between the interest rate spread and commodity prices may come from creditors decreasing the required interest rate premium during the commodity price boom phase, as the collateral value of the economy depends directly on commodity prices through export earnings. For examples of the negative relationship between world commodity prices and country risk, seeBastourre et al (2012);Aslam et al (2016);Hilscher and Nosbusch (2010);Bouri et al (2016) andBarone and Descalzi (2012). For an example of the link between large capital inflows and an increase in consumption, investment, and private credit, seeBenigno et al (2015).…”

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confidence: 99%

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Disentangling Commodity Demand, Commodity Supply, and International Liquidity Shocks on An Emerging Market

Fry-McKibbin

Souza

2020

SSRN Journal

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This paper examines the effects of commodity demand and supply shocks as well as international liquidity shocks on the small open economy of Brazil using an SVAR model. The paper highlights the importance of modeling both types of shocks in the commodity sector. Including only commodity prices overstates the effect of commodity price shocks on the output of Brazil. Commodity demand shocks are much larger than commodity supply shocks in the long run. Including commodity demand and international liquidity also reduces the impact of commodity price shocks on the interest rate made available to Brazil in international capital markets. The interest rate channel is considered a source of business cycles for emerging market economies in the literature. AbstractThis paper examines the effects of commodity demand and supply shocks as well as international liquidity shocks on the small open economy of Brazil using an SVAR model. The paper highlights the importance of modeling both types of shocks in the commodity sector. Including only commodity prices overstates the effect of commodity price shocks on the output of Brazil. Commodity demand shocks are much larger than commodity supply shocks in the long run. Including commodity demand and international liquidity also reduces the impact of commodity price shocks on the interest rate made available to Brazil in international capital markets. The interest rate channel is considered a source of business cycles for emerging market economies in the literature.

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Section: Datamentioning

confidence: 99%

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confidence: 99%

Disentangling Commodity Demand, Commodity Supply, and International Liquidity Shocks on An Emerging Market

Fry-McKibbin

Souza

2020

SSRN Journal

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“…The analysis of ToT shock effects on investment rates is of particular interest as it provides hints about the medium-term dynamics of GDP and the future paths of potential growth. A recent study by Aslam et al (2016) suggests that, in presence of ToT shocks, long run or potential GDP is ultimately affected by the short-run responses of investment and its impact on the working capital stock of the economy. Also, the empirical evidence therein presented shows that investment movements (due to ToT shocks) have more immediate consequences on demand, activity and current account levels.…”

Section: Introductionmentioning

confidence: 99%

Asymmetric Effects of Terms of Trade Shocks on Tradable and Non-tradable Investment Rates: The Colombian Case

Cárdenas-Hurtado¹,

Garavito-Acosta²,

Toro-Córdoba³

2018

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The opinions contained in this document are the sole responsibility of the authors and do not commit Banco de la República or its Board of Directors. AbstractTerms of trade (ToT) shocks drive business cycles and have direct impact on the macroeconomic equilibrium conditions in commodity-exporter countries. ToT shocks also affect the dynamics of other variables such as national income and relative prices, and consequently, cause agents and firms to adjust their saving, spending and investment decisions accordingly. The latter is of special interest because of its link with potential GDP and the capital stock of the economy, relevant concepts when assessing sustainable and long-run growth. In this document we explore how tradable and nontradable investment rates respond asymmetrically to ToT shocks. We estimate a Threshold VAR (TVAR) in which the ToT are the transition variable. The empirical results suggest the existence of two regimes (low and high ToT levels) and that ToT shocks have different effects on tradable and nontradable investment rates depending not only the direction of the shock, but also on the levels from which the shock departs.

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“…The first is direct, through the impact of improving commodity prices on export revenues. Aslam et al (2016) found that historically commodity price booms led to sizable output gains in commodity exporters. The effect is stronger for countries with lower levels of financial development, more pro-cyclical fiscal policies and less flexible exchange rates.…”

Section: The Push and Pull Factor Frameworkmentioning

confidence: 99%

Measuring Tailwind in an Emerging Market Economy: The Case of Argentina

Ocampo

2016

SSRN Journal

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. This paper introduces an index that seeks to objectively measure the intensity of favorable external conditions that can lead to improved macroeconomic performance in Argentina. The country is a net exporter of commodities and a net importer of capital, therefore it benefits from rising prices in international commodity markets and the availability of low cost long-term capital. The index is partly based on the framework of "push" and "pull" factors developed in the early 1990s to explain international capital flows into emerging markets economies and my own experience as an international investment banker during the nineties. Terms of use: Documents in EconStor may

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Trading on Their Terms? Commodity Exporters in the Aftermath of the Commodity Boom

Cited by 40 publications

References 45 publications

Disentangling Commodity Demand, Commodity Supply, and International Liquidity Shocks on An Emerging Market

Disentangling Commodity Demand, Commodity Supply, and International Liquidity Shocks on An Emerging Market

Asymmetric Effects of Terms of Trade Shocks on Tradable and Non-tradable Investment Rates: The Colombian Case

Measuring Tailwind in an Emerging Market Economy: The Case of Argentina

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