Exchange Rate Policy and the Resources Boom*

Corden, W. M.

doi:10.1111/j.1475-4932.1982.tb00346.x

Cited by 46 publications

(28 citation statements)

References 21 publications

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“…In cases where investors can make a greater return on domestic rather than foreign investments, it is less likely that the measure of foreign savings used in this analysis will include such flows of money. occurs when rising export receipts from the sale of oil increase the amount of currency entering the domestic economy, causing a country's exchange rate to appreciate (Corden and Neary 1982;Corden 1984). As the real exchange rate appreciates, a country's exports become more expensive, less competitive, and unprofitable to produce.…”

Section: The Benefits Of Saving Oil Revenue Abroadmentioning

confidence: 97%

Instability and Oil: How Political Time Horizons Affect Oil Revenue Management

Kendall-Taylor

2011

St Comp Int Dev

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While economic explanations for the "resource curse" are well established, the political factors explaining why governments fail to take corrective action remain poorly understood. Research demonstrates that if governments save oil profits abroad and slowly re-introduce the oil-generated revenue into the domestic economy once the rate of return on investment is greater at home than abroad and the quality of project implementation developed, many of the economic problems that plague oil-rich countries can be avoided. Political time horizons shape the incentives of governments to pursue this strategy. Unstable leaders rely on oil revenue to maintain positions of power. They also have less incentive to save oil windfalls abroad as they fear they will not be in office long enough to benefit from such decisions. This paper uses both quantitative data and case study analysis of Azerbaijan and Kazakhstan to demonstrate that leaders with longer time horizons save a greater proportion of oil windfalls abroad than their less stable counterparts, helping avoid the economic pitfalls of oil abundance.

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Section: The Benefits Of Saving Oil Revenue Abroadmentioning

confidence: 97%

Instability and Oil: How Political Time Horizons Affect Oil Revenue Management

Kendall-Taylor

2011

St Comp Int Dev

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“…Which types of investment would expand fastest in a free-market setting depends on their expected rates of return. The more densely populated, natural resource-poor 1 In fact, the increased demand for nontradables (and other products) would begin as soon as expectations about future income prospects rose, which could be well before the mining export boom shows up in the trade statistics, especially in the case where the exports are preceded by foreign direct investment (FDI) inflows for investments with a long lead time (Corden 1982).…”

Section: Theory and Past Experiencementioning

confidence: 99%

Agriculture and Food Security in Asia by 2030

Anderson

Strutt

2012

SSRN Journal

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in Asian Development Bank InstituteThe Working Paper series is a continuation of the formerly named Discussion Paper series; the numbering of the papers continued without interruption or change. ADBI's working papers reflect initial ideas on a topic and are posted online for discussion. ADBI encourages readers to post their comments on the main page for each working paper (given in the citation below). Some working papers may develop into other forms of publication. The views expressed in this paper are the views of the authors and do not necessarily reflect the views or policies of ADBI, the ADB, its Board of Directors, or the governments they represent. ADBI does not guarantee the accuracy of the data included in this paper and accepts no responsibility for any consequences of their use. Terminology used may not necessarily be consistent with ADB official terms.Asian Development Bank Institute Kasumigaseki Building 8F 3-2-5 Kasumigaseki, Chiyoda-ku Tokyo 100-6008, JapanTel:+81-3-3593-5500 Fax:+81-3-3593-5571 URL:www.adbi.org E-mail: info@adbi.org AbstractRapid trade-led economic growth in emerging Asia has been shifting the global economic and industrial centres of gravity away from the north Atlantic, raising the importance of Asia in world trade but also altering the commodity composition of trade by Asia and other regions. What began with Japan in the 1950s and the Republic of Korea and Taipei,China from the late 1960s has spread to the much more populous ASEAN region, the People's Republic of China, and India. This paper examines how that growth and associated structural changes are altering agricultural markets in particular and thereby food security. It does so retrospectively and by projecting a model of the world economy that compares alternative growth strategies, trade policy scenarios and savings behaviors to 2030. Projected impacts on sectoral shares of gross domestic product (GDP), "openness" to trade and the composition and direction of trade are drawn out, followed by effects of the boom in non-farm sectors on agricultural self-sufficiency and real food consumption per capita in Asia and elsewhere. The paper concludes by drawing implications for policies that can address more efficiently Asia's concerns about food security and rural-urban income disparity than the trade policy measures used by earlier-industrializing Northeast Asia.JEL Classification: D58, F13, F15, F17, Q17

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“…Consequently, they will tend to export less. The resource sector has a negative impact on the other sectors of the economy via the revaluation of the exchange rate (Corden 1981).…”

Section: The Impact Of the Resource Sector On The Economymentioning

confidence: 99%