Advanced Search
MyIDEAS: Login

Commodity Currencies: A Macroeconomic Interpretation

Contents:

Author Info

  • Polasek, Matt

    (Flinders University, South Australia)

Registered author(s):

    Abstract

    The paper investigates if there is a theoretical basis for the "commodity currency" phenomenon in small open economies exporting Okun's "auction goods" under short-term capacity constraints. It is shown under a variety of assumed conditions that commodity prices map into currency movements which are inline with those expected by the "commodity currency" hypothesis and that this holds irrespective of whether trade is initially balanced or not. The case of a "perfect" commodity currency may be said to arise where the domestic cost and price effects of fluctuating commodity prices are fully neutralised by the accompanying movements in nominal exchange rates. It is further shown that while the present regime of floating exchanges and high international capital mobility limits the scope in primary exporting countries for stimulating output and employment when commodity prices are high, the system is less prone to inflationary excesses than the previous regime of fixed or regulated exchange rates.

    Download Info

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
    File URL: http://eap-journal.com/download.php?file=474
    Download Restriction: no

    Bibliographic Info

    Article provided by Queensland University of Technology (QUT), School of Economics and Finance in its journal Economic Analysis and Policy (EAP).

    Volume (Year): 34 (2004)
    Issue (Month): 1 (March)
    Pages: 63-78

    as in new window
    Handle: RePEc:eap:articl:v:34:y:2004:i:1:p:63-78

    Contact details of provider:
    Postal: GPO Box 2434, BRISBANE QLD 4001
    Email:
    Web page: http://www.eap-journal.com/
    More information through EDIRC

    Related research

    Keywords: Currencies; Currency; Open Economies; Trade;

    Find related papers by JEL classification:

    References

    References listed on IDEAS
    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
    as in new window
    1. Paul Krugman, 1993. "Recent Thinking About Exchange Rate Determination and Policy," RBA Annual Conference Volume, in: Adrian Blundell-Wignall (ed.), The Exchange Rate, International Trade and the Balance of Payments Reserve Bank of Australia.
    2. T. W.Swan, 1960. "Economic Control In A Dependent Economy," The Economic Record, The Economic Society of Australia, vol. 36(73), pages 51-66, 03.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as in new window

    Cited by:
    1. Kenneth W. Clements & Renee Fry, 2006. "Commodity Currencies And Currency Commodities," CAMA Working Papers 2006-19, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.

    Lists

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    Statistics

    Access and download statistics

    Corrections

    When requesting a correction, please mention this item's handle: RePEc:eap:articl:v:34:y:2004:i:1:p:63-78. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Manuela Torgler).

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.