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Commodity Prices, Growth and Productivity: a Sectoral View

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  • Claudia De la Huerta
  • Javier Garcia-Cicco

Abstract

We construct TFP series at a sectoral level for Chile and analyze how commodity price shocks affect these measures. The Dutch-Disease literature is concerned by that possible fall in productivity in the industrial sector after a commodity boom, as that sector may be a mayor driver of TFP improvements for the economy as a whole. Our results provide evidence that indeed Industrial TFP is negatively affected by positive commodity price shocks, both after either temporary or permanent shocks. However, despite this effect, TFP at the aggregate level is not necessarily reduced. In particular, Aggregate TFP does not seems to be significantly affected by the shock, while if we exclude Commodities and Utilities, or if we just focus on non-traded sectors, TFP actually tends to increase. This results holds even controlling for the possibility of sectoral relocations of resources in measuring TFP at an aggregate level

Suggested Citation

  • Claudia De la Huerta & Javier Garcia-Cicco, 2016. "Commodity Prices, Growth and Productivity: a Sectoral View," Working Papers Central Bank of Chile 777, Central Bank of Chile.
    • Handle: RePEc:chb:bcchwp:777
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    File URL: https://www.bcentral.cl/documents/33528/133326/DTBC_777.pdf
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    References listed on IDEAS

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    Cited by:

    1. Pierre JACQUET & Alexis ATLANI & Marwan LISSER, 2017. "Policy responses to terms of trade shocks," Working Papers P205, FERDI.
    2. Pierre JACQUET & Alexis ATLANI & Marwan LISSER, 2017. "Policy responses to terms of trade shocks," Working Papers P205, FERDI.
    3. Iván Kataryniuk & Jaime Martínez-Martín, 2019. "TFP Growth and Commodity Prices in Emerging Economies," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 55(10), pages 2211-2229, August.

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