Trading on Their Terms? Commodity Exporters in the Aftermath of the Commodity Boom
February 15, 2016
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Summary
Commodity prices have declined sharply over the past three years, and output growth has slowed considerably among countries that are net exporters of commodities. A critical question for policy makers in these economies is whether commodity windfalls influence potential output. Our analysis suggests that both actual and potential output move together with commodity terms of trade, but that actual output comoves twice as strongly as potential output. The weak commodity price outlook is estimated to subtract 1 to 2¼ percentage points from actual output growth annually on average during 2015-17. The forecast drag on potential output is about one-third of that for actual output.
Subject: Commodities, Commodity booms, Commodity prices, Potential output, Prices, Production, Total factor productivity
Keywords: commodity boom, Commodity booms, commodity cycle, commodity exporter, commodity price boom, commodity price cycle, Commodity prices, commodity sector, commodity terms of trade, commodity terms-of-trade windfall, commodity-exporting economy, East Asia, exchange rate, Global, Natural Resources, Potential Output, price boom, Resource Boom, Terms of Trade, terms-of-trade shock, total factor productivity, Total factor productivity, WP
Pages:
49
Volume:
2016
DOI:
Issue:
027
Series:
Working Paper No. 2016/027
Stock No:
WPIEA2016027
ISBN:
9781498338158
ISSN:
1018-5941
