Asymmetric Non-Commodity Output Responses to Commodity Price Shocks
IMF Working Papers, June 11, 2021
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- Asymmetric Non-Commodity Output Responses to Commodity Price Shocks
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Bibliographic details
- Authors: Amine Mati, Monique Newiak, James Wilson
- Published: June 11, 2021
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781513573359.001
Research question and methodology
- Focus: identifying potential asymmetric responses of non-commodity output growth to positive and negative commodity terms-of-trade shocks.
- Sample: 27 oil-exporting countries.
- Method: panel VAR.
Key findings
- The short-and medium-run response of real non-commodity GDP growth is larger for negative shocks than positive shocks.
- Asymmetry is more pronounced in countries with weak pre-existing fundamentals:
- High levels of public debt.
- Low levels of international reserves.
- These weak fundamentals also serve to amplify the volatility of the response.
- The output response to positive shocks is stronger following a sustained period of CTOT increases.
- The impact of negative shocks on output is more damaging when they occur after a period of CTOT decline.
Subject areas and keywords
- Subjects: Commodities, Commodity price fluctuations, Commodity price indexes, Commodity prices, Oil, Prices.
- Keywords: A. commodity exporter, Caribbean, Central and Eastern Europe, Central Asia, commodity exporter, Commodity price fluctuations, Commodity price indexes, Commodity prices, commodity Real GDP, GDP Response, Global, Middle East, North Africa, Oil, terms-of-trade shock.
Source: Amine Mati, Monique Newiak, James Wilson; IMF Working Paper "Asymmetric Non-Commodity Output Responses to Commodity Price Shocks", June 11, 2021.
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- Working Paper