Another price shock?
In: Studia diplomatica: Brussels journal of international relations, Band 43, Heft 1, S. 61-70
ISSN: 0770-2965
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In: Studia diplomatica: Brussels journal of international relations, Band 43, Heft 1, S. 61-70
ISSN: 0770-2965
World Affairs Online
In: Revista CEPAL, Heft 76, S. 179-197
ISSN: 0252-0257
The adverse shock affecting commodity prices has received little attention, at least by comparison with the recent financial crisis. The latest fall in international prices shows that, contrary to what is claimed in the empirical literature, most of these prices tend to move in unison during periods of expansion and contraction in the economic cycle. Constant shocks help account for the variability of Bolivian export prices, and the inclusion of a new sector, soya, in the export portfolio has not reduced overall risk. The conclusion is that Bolivia's policy of diversifying commodity exports has not had the effect of reducing risk, evening out cycles, reducing price volatility or increasing real export revenue. It is suggested that manufacturing exports be developed to make the country less
World Affairs Online
In: CEPAL review, Band 2002, Heft 76, S. 167-183
ISSN: 1684-0348
This paper shows how a world price shock can increase the likelihood that democratization must be used to resolve the threat of revolution. Initially, a ruling elite may be able to use trade policy to maintain political stability. But a world price shock can push the country into a situation where the elite face a commitment problem that only democratization can resolve. Because the world price shock may also reduce average incomes, the model provides a way to understand why the level of national income per capita and democracy may not be positively correlated. The model is also useful for understanding dictatorial regimes' rebuttal of World Bank calls to keep their export markets open in the face of the 2007-08 world food crisis.
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In: FRB Richmond Working Paper No. 22-7
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In: Bank of Italy Temi di Discussione (Working Paper) No. 1448
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In: Journal of monetary economics, Band 144, S. 103547
The paper analyzes the dynamic effects of anticipated price increases of imported raw materials upon two large open economies. It is assumed that the economies have an asymmetric macroeconomic structure on the supply side and are dependent upon a small third country for oil or raw materials imports. The dynamic behavior of several macroeconomic variables is discussed both under US dollar and Euro-currency denomination. It is shown that with Euro-currency denominated oil the stagnationary effects of oil price increases upon both the domestic and foreign economy are reduced. The paper also discusses several monetary policy responses to oil price shocks.
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In: CESifo Working Paper Series No. 5228
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Working paper
In: Australian economic history review: an Asia-Pacific journal of economic, business & social history, Band 51, Heft 2, S. 150-177
ISSN: 1467-8446
In: The Canadian journal of economics: the journal of the Canadian Economics Association = Revue canadienne d'économique, Band 49, Heft 2, S. 789-814
ISSN: 1540-5982
AbstractThis paper studies the impact of a wide set of energy price shocks on external balances using a two‐country framework comprising multiple sectors and endogenous energy production with convex costs. The paper disentangles different demand and supply shocks in the energy market through their distinct impact on external balances. It provides a theoretical confirmation of Kilian et al. (2009) and a theoretical foundation to the determining role of the non‐energy trade balance in the transmission of energy price shocks. The presence of durables also highlights the immediate channel through which energy prices impact the non‐energy trade balance.
In: IMF Working Papers
The experience of developing countries over 1990-2010 indicates that commodity prices have a significant impact on fiscal outcomes. Both revenue and expenditure rise in response to commodity (import or export) price increases; the response of the fiscal deficit is ambiguous. A floating exchange rate regime only partially offsets the impact; foreign-exchange reserves do not dampen the effects. Hence, there is a strong case for fiscal hedging against commodity price shocks. Hedging instruments based on a limited set of benchmark world prices for a narrow set of commodities may suffice to realize
In: The B.E. journal of economic analysis & policy, Band 15, Heft 2, S. 475-501
ISSN: 1935-1682
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This paper examines if an energy price shock should be compensated by a reduction in energy taxes to mitigate its impact on consumer prices. It shows that the consumer price should not increase by as much as the producer price, implying a small reduction in the energy tax in dollars. The energy tax rate, on the other hand, decreases sharply. This decline is primarily due to an adjustment in the Pigouvian component: A constant marginal social damage being divided by a higher producer price. The redistributive component of the tax remains at about 10% of the social cost of energy.