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Commodities fluctuations, cross border flows and financial innovation: A stock‐flow analysis

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  • Lorenzo Nalin
  • Giuliano Toshiro Yajima

Abstract

At the beginning of the 2000s, Latin America countries experienced rising commodities prices and, in turn, foreign investors shifted part of their portfolio composition toward the region. Unlike past episodes, more integrated financial markets allowed international players to invest in a wider range of financial instruments, usually related to composite commodity indexes. We investigate the macroeconomic implications of such innovative practices, focusing in particular on currency swings, by adopting a stock‐flow consistent (SFC) framework. The element of novelty of our contribution consists in depicting a financial sector, which issues Commodity‐Linked Notes (CLNs) to be sold to households in the developed country.

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  • Lorenzo Nalin & Giuliano Toshiro Yajima, 2021. "Commodities fluctuations, cross border flows and financial innovation: A stock‐flow analysis," Metroeconomica, Wiley Blackwell, vol. 72(3), pages 539-579, July.
    • Handle: RePEc:bla:metroe:v:72:y:2021:i:3:p:539-579
    DOI: 10.1111/meca.12333
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    Cited by:

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    2. Giuliano Toshiro Yajima, 2022. "Chile: The Road to Joy Is Paved with Obstacles," Economics Policy Note Archive 22-3, Levy Economics Institute.
    3. Francesco Zezza & Gennaro Zezza, 2023. "A prototype regional stock‐flow consistent model," Metroeconomica, Wiley Blackwell, vol. 74(2), pages 266-287, May.
    4. José Pedro Bastos Neves & Willi Semmler, 2022. "Credit, output and financial stress: A non‐linear LVSTAR application to Brazil," Metroeconomica, Wiley Blackwell, vol. 73(3), pages 900-923, July.
    5. Giuliano Toshiro Yajima, 2022. "Chile: The road to joy is paved with obstacles," PSL Quarterly Review, Economia civile, vol. 75(302), pages 285-297.

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