Commodity Prices and the Terms of Trade
On combining national terms-of-trade data for developing countries with world prices of internationally traded primary commodities, it is found that variation in the world prices of three or fewer key exported commodities account for 50% or more of the annual variation in the terms of trade of a typical developing country. A considerable fraction of the variation is specific to a particular commodity and, given that the overall importance of primary commodities differs across developing countries, it is possible to account for much of the heterogeneity across them. It is concluded that commodity price fluctuations should be central features of two related literatures: studies of business cycle transmission across developing and industrialized nations, and empirical work aimed at constructing perpetual claims on developing country incomes as suggested by Shiller in 1995. Copyright 2000 by Blackwell Publishing Ltd.
(This abstract was borrowed from another version of this item.)
|Date of creation:||Dec 1997|
|Date of revision:|
|Contact details of provider:|| Postal: |
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.:
- Reinhart, Carmen & Wickham, Peter, 1994.
"Non-oil commodity prices: Cyclical weakness or secular decline?,"
13871, University Library of Munich, Germany.
- Carmen M. Reinhart & Peter Wickham, 1994. "Commodity Prices: Cyclical Weakness or Secular Decline?," IMF Staff Papers, Palgrave Macmillan, vol. 41(2), pages 175-213, June.
- Peter Wickham & Carmen Reinhart, 1994. "Commodity Prices: Cyclical Weakness or Secular Decline?," IMF Working Papers 94/7, International Monetary Fund.
- Reinhart, Carmen & Wickham, Peter, 1994. "Commodity Prices: Cyclical Weakness or Secular Decline?," MPRA Paper 8173, University Library of Munich, Germany.
- Cuddington, John T & Urzua, Carlos M, 1989. "Trends and Cycles in the Net Barter Terms of Trade: A New Approach," Economic Journal, Royal Economic Society, vol. 99(396), pages 426-42, June.
- Deaton, A. & Laroque, G., 1989.
"On The Behavior Of Commodity Prices,"
145, Princeton, Woodrow Wilson School - Public and International Affairs.
- Shiller, Robert J., 1995.
"Aggregate income risks and hedging mechanisms,"
The Quarterly Review of Economics and Finance,
Elsevier, vol. 35(2), pages 119-152.
- Robert J. Shiller, 1993. "Aggregate Income Risks and Hedging Mechanisms," Cowles Foundation Discussion Papers 1048, Cowles Foundation for Research in Economics, Yale University.
- Robert J. Shiller, 1993. "Aggregate Income Risks and Hedging Mechanisms," NBER Working Papers 4396, National Bureau of Economic Research, Inc.
- Granger, C. W. J. & Newbold, P., 1974. "Spurious regressions in econometrics," Journal of Econometrics, Elsevier, vol. 2(2), pages 111-120, July.
- Hall, Robert E, 1978. "Stochastic Implications of the Life Cycle-Permanent Income Hypothesis: Theory and Evidence," Journal of Political Economy, University of Chicago Press, vol. 86(6), pages 971-87, December.
- Grossman, Gene M & Razin, Assaf, 1984.
"International Capital Movements under Uncertainty,"
Journal of Political Economy,
University of Chicago Press, vol. 92(2), pages 286-306, April.
- Phillips, P.C.B., 1986.
"Understanding spurious regressions in econometrics,"
Journal of Econometrics,
Elsevier, vol. 33(3), pages 311-340, December.
- Peter C.B. Phillips, 1985. "Understanding Spurious Regressions in Econometrics," Cowles Foundation Discussion Papers 757, Cowles Foundation for Research in Economics, Yale University.
- Michael A. Kouparitsas, 1997. "North-South terms of trade: an empirical investigation," Working Paper Series, Macroeconomic Issues WP-97-05, Federal Reserve Bank of Chicago.
- Bleaney, Michael F & Greenaway, David, 1993. "Long-Run Trends in the Relative Price of Primary Commodities and in the Terms of Trade of Developing Countries," Oxford Economic Papers, Oxford University Press, vol. 45(3), pages 349-63, July.
- Sapsford, D, 1985. "The Statistical Debate on the Net Barter Terms of Trade between Primary Commodities and Manufactures: A Comment and Some Additional Evidence," Economic Journal, Royal Economic Society, vol. 95(379), pages 781-88, September.
When requesting a correction, please mention this item's handle: RePEc:osu:osuewp:98-01. 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: (John Slaughter)
If references are entirely missing, you can add them using this form.