Commodities Prices Volatility, Expected Inflation and GDP Levels: An Application for a Net-exporting Economy

Moreira, Ricardo Ramalhete

doi:10.1016/s2212-5671(14)00732-1

Cited by 8 publications

(6 citation statements)

References 10 publications

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“…Moreover, an increase in import price is also one of the underlying causes of inflation, because a growth in import price can lead to an increase in expected inflation in the long run. 61 Therefore, an inflation can further result in higher export price and eventually reduce the export sector’s export volume.…”

Section: Resultsmentioning

confidence: 99%

Dynamic effect of environmental tax on export trade: Based on DSGE mode

Gao

Yao

Wang

et al. 2019

Energy & Environment

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We develop a Dynamic Stochastic General Equilibrium (DSGE) model with four sectors, including households, production, government, and export. The model is used to assess the response of China’s export trade to environmental tax shocks. The model parameters are obtained through a combination of calibration and Bayesian estimation. Using the impulse response analysis and variance decomposition, we find that environmental tax shocks can drive the reduction of export volume in China. However, the effect of the environmental tax shocks is smaller than export price mark-up rate shocks. These findings yield important implications for reasonably designing and choosing environmental tax rate and export trade policies.

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Section: Resultsmentioning

confidence: 99%

Dynamic effect of environmental tax on export trade: Based on DSGE mode

Gao

Yao

Wang

et al. 2019

Energy & Environment

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“…Emerging or poor countries might have unpleasant experiences with policy changes in terms of high inflation or reduced output, as a result people tend to keep an eye on interest rates. Therefore, one needs to calibrate their communication strategy through post-meeting press briefings, statements by financial experts and open letters according to the awareness levels of agents (Moreira, 2014, 2020). However, since this is a novel approach, it demands extensive research in future to understand the challenges to implementing inflation expectations as a policy tool and propose new communication strategies to improve the responsiveness of expectations to monetary policy.…”

Section: Findings and Discussionmentioning

confidence: 99%

“…However, it is detrimental to the welfare of Ricardian households who earn less profits now. Many economies can take advantage of the boom periods and save their fiscal revenues from exports (García & Mejía, 2018; Moreira, 2014). These funds can be used to offer price subsidies to maximise the welfare of non-Ricardian households.…”

Section: Findings and Discussionmentioning

confidence: 99%

A Decade of Impact of Monetary Policy on Food Inflation: An Overview and Future Direction

Kaur

2021

Vision: The Journal of Business Perspective

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This article presents a systematic literature review spanning the decade of 2010–2020 in a thematic fashion. It provides an in-depth analysis of how monetary policy regimes are responding to food inflation. It discusses about factors driving food inflation and the manner in which efficiency of financial markets facilitate policy transmission. Further, it explains how food insecurity is exacerbated by rise in food prices and the way high-income countries protect their farmers through input subsidies, indirectly contributing to global food price hike. It also argues that a strong monetary policy credibility can lend stationarity and mean-reversion to inflation rates. Next, it discusses the issues faced by central banks in measurement of inflation such as conflict of choice in different inflation measures and supply side constraints ranging from high farm-to-fork mark-ups to cartelization and hoarding. In subsequent section, it deals with the question whether to target headline or core inflation. After that, it presents a snapshot of various advanced and emerging countries operating their monetary policy in the presence of fiscal policy. It illustrates that the degree of fiscal intervention should be decided according to individual threshold of every country, taking into account the proportion of Ricardian and non-Ricardian population.

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“…This means a lack of clear predictions regarding the consequences of rising costs of raw materials on world markets β < > 1 ( 0). Although in some cases a favorable relationship was obtained (Jawaid & Waheed, 2011), the dependence on commodity price volatility is mostly negative (Cavalcanti, Mohaddes, & Raissi, 2012;Bodart, Candelon, & Carpantier, 2012;Moreira, 2014), β < 2 0. In some cases, there are differences in the context of individual commodities.…”

Section: Research Modelmentioning

confidence: 95%

Influence of World Commodity Prices on the Dynamics of Income of Exporting Countries of Natural Resources Under Globalization

Ніконенко

Hanushchyn

Boikivska

et al. 2020

Business: Theory and Practice

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A feature of modern globalization processes is their vulnerability to the volatility of short-term capital flows, which, combined with the growing volatility of commodity prices, have created serious difficulties for the economic policies of commodity-oriented countries. Therefore, the study of the impact of world commodity prices on the dynamics of economic growth of countries with commodity exports and the development of an appropriate methodology based on modern economic and mathematical tools is an urgent task. The purpose of the study is the impact of volatility and the level of world commodity prices on income dynamics (GDP and industrial production) using three groups of countries with different levels of economic development as an example. Functional dependencies were studied for three groups of countries: industrial countries exporting raw materials, countries – commodity exporters of low income and commodity countries of the former Soviet Union. The analysis is based on quarterly data for the period 1980–2018 using the Two-Step Least Squares (2SLS) method. We developed a methodology for the economic and statistical analysis of the functional dependencies of the commodity economy, which provides for the simultaneous accounting of the level of world commodity prices and their volatility, allows us to empirically evaluate the mechanisms of the macroeconomic influence of commodity prices on the dynamics of economic growth, primarily income (GDP and industrial production). It has been established that rising world prices for raw materials improves the dynamics of GDP and industrial production of countries exporting primary resources, while the consequences of high volatility of price indices are predominantly negative. If the impact on the economic growth of the exporting countries of raw materials of individual price indices coincides, then the corresponding estimates for volatility can differ significantly.

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Commodities Prices Volatility, Expected Inflation and GDP Levels: An Application for a Net-exporting Economy

Cited by 8 publications

References 10 publications

Dynamic effect of environmental tax on export trade: Based on DSGE mode

Dynamic effect of environmental tax on export trade: Based on DSGE mode

A Decade of Impact of Monetary Policy on Food Inflation: An Overview and Future Direction

Influence of World Commodity Prices on the Dynamics of Income of Exporting Countries of Natural Resources Under Globalization

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