Fiscal Policy, the Real Exchange Rate and Commodity Prices
Summary:
The role of the international commodity market in transmitting disturbances is considered in a model that incorporates commodities as an input in production. The analysis employs a three-country framework: a liquidity-constrained commodity supplier and two industrial countries that import the commodity, export differentiated manufactured goods and hold the outstanding debt of the commodity exporter. In this setting the impact of changes in fiscal policy, commodity supplies, and the real interest rate are assessed. Particular attention is paid to the responses of the real exchange rate, commodity prices, and the international distribution of debt to the various shocks.
Series:
Working Paper No. 1990/091
Subject:
Commodities Commodity prices Consumption Fiscal policy Foreign exchange National accounts Prices Real exchange rates
Notes:
Also published in Staff Papers, Vol. 38, No. 3, September 1991.
English
Publication Date:
October 1, 1990
ISBN/ISSN:
9781451851434/1018-5941
Stock No:
WPIEA0911990
Pages:
20
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