scholarly journals Economic Shocks and Conflict: Evidence from Commodity Prices

2014 ◽  
Vol 6 (4) ◽  
pp. 1-38 ◽  
Author(s):  
Samuel Bazzi ◽  
Christopher Blattman
Keyword(s):  
High Risk ◽  
Time Dependence ◽  
Export Price ◽  
Commodity Prices ◽  
Political Stability ◽  
Economic Shocks ◽  
Price Shocks ◽  
State Capture ◽  
State Revenues

Higher national incomes are correlated with political stability. Is this relationship causal? We test three theories linking income to conflict with new data on export price shocks. Price shocks have no effect on new conflict, even large shocks in high-risk nations. Rising prices, however, weakly lead to shorter, less deadly wars. This evidence contradicts the theory that rising state revenues incentivize state capture, but supports the idea that rising revenues improve counter-insurgency capacity and reduce individual incentives to fight in existing conflicts. Conflict onset and continuation follow different processes. Ignoring this time dependence generates mistaken conclusions about income and instability. (JEL D72, D74, O13, O17, O19, Q02, Q34)

Evaluating Soybean Aphid-Resistant Varieties in Different Environments to Estimate Financial Outcomes

2019 ◽  
Vol 113 (2) ◽  
pp. 940-948
Author(s):  
Ashley N Dean ◽  
Shelby Pritchard ◽  
John C Tyndall ◽  
Erin W Hodgson ◽  
Matthew E O’Neal
Keyword(s):  
High Risk ◽  
Commodity Prices ◽  
Herbicide Tolerance ◽  
Soybean Aphid ◽  
Economic Threshold ◽  
Planting Dates ◽  
Financial Outcomes ◽  
Resistant Varieties ◽  
Significant Difference ◽  
Aphis Glycines Matsumura

Abstract Farmers face many choices when selecting seed for soybean (Glycine max (L.) Merr.) production, including highly desired herbicide tolerance traits. Despite the convenience of herbicide tolerance, resistant weeds and technology fees may reduce utility and profitability of these varieties, especially when commodity prices are low. Sporadic outbreaks of soybean aphid (Aphis glycines Matsumura, Hemiptera: Aphididae) that require insecticide use for optimal yield can be a further complication for farmers in Iowa. Soybean aphid-resistant varieties are commercially available, but in limited genetic backgrounds without herbicide tolerance. We hypothesized yield and value of resistance traits will vary based on the environment. We established plots at two locations with different risks of soybean aphid outbreaks and used two planting dates at each location to mimic different yield environments. In 2016 and 2017, we planted four varieties that varied in their susceptibility to soybean aphids and glyphosate, and applied insecticides if aphid populations reached an economic threshold. Regardless of genetic background, aphid-resistant varieties prevented populations from reaching the economic threshold at all environments. We observed no significant difference in yield between resistant and susceptible varieties, revealing this trait is as effective at protecting yield as an insecticide application on susceptible varieties at the high-risk location. We also explored the value of each variety in different environments. Resistant varieties produced greater potential net revenue than susceptible varieties at the high-risk location, while the opposite occurred at the low-risk location. Resistant varieties with herbicide tolerance, if made available, would be the most valuable across all environments.

scholarly journals Breaks, trends and unit roots in commodity prices: a robust investigation

2014 ◽  
Vol 18 (1) ◽  
Author(s):  
Atanu Ghoshray ◽  
Mohitosh Kejriwal ◽  
Mark Wohar
Keyword(s):  
Unit Root ◽  
Structural Breaks ◽  
Commodity Prices ◽  
Unit Roots ◽  
Commodity Price ◽  
Policy Implications ◽  
Price Shocks ◽  
Price Series ◽  
Commodity Price Shocks ◽  
Trend Breaks

AbstractThis paper empirically examines the time series behavior of primary commodity prices relative to manufactures with reference to the nature of their underlying trends and the persistence of shocks driving the price processes. The direction and magnitude of the trends are assessed employing a set of econometric techniques that is robust to the nature of persistence in the commodity price shocks, thereby obviating the need for unit root pretesting. Specifically, the methods allow consistent estimation of the number and location of structural breaks in the trend function as well as facilitate the distinction between trend breaks and pure level shifts. Further, a new set of powerful unit root tests is applied to determine whether the underlying commodity price series can be characterized as difference or trend stationary processes. These tests treat breaks under the unit root null and the trend stationary alternative in a symmetric fashion thereby alleviating the procedures from spurious rejection problems and low power issues that plague most existing procedures. Relative to the extant literature, we find more evidence in favor of trend stationarity suggesting that real commodity price shocks are primarily of a transitory nature. We conclude with a discussion of the policy implications of our results.

Managing Global Growth Risks and Commodity Price Shocks - Vulnerabilities and Policy Challenges for Low-Income Countries

Policy Papers ◽  
2011 ◽  
Vol 11 (76) ◽  
Author(s):  
Keyword(s):  
Low Income ◽  
Commodity Prices ◽  
Commodity Price ◽  
Analytical Framework ◽  
Low Income Countries ◽  
Price Shocks ◽  
Commodity Price Shocks ◽  
The Face ◽  
Global Growth

As part of its work to help low-income countries (LICs) manage volatility, the IMF has recently developed an analytical framework to assess vulnerabilities and emerging risks that arise from changes in the external environment (see IMF, 2011a). This report draws on the results of the first Vulnerability Exercise for LICs (VE-LIC) conducted by IMF staff using this new framework. The report focuses on the risks of a downturn in global growth and of further global commodity price shocks, and discusses related policy challenges. The report is organized as follows: Chapter I reviews recent macroeconomic developments, including the spike in global commodity prices earlier this year. Chapter II assesses current risks and vulnerabilities, including how a sharp downturn in global growth and further commodity price shocks would affect LICs. Chapter III discusses policy challenges in the face of these risks and vulnerabilities.

Response to Pauline Jones Luong's review of Oil Wealth and the Poverty of Politics: Algeria Compared

2013 ◽  
Vol 11 (2) ◽  
pp. 598-598
Author(s):  
Miriam R. Lowi
Keyword(s):  
Saudi Arabia ◽  
Comparative Analysis ◽  
Middle Eastern ◽  
Resource Curse ◽  
Political Stability ◽  
Rentier State ◽  
Economic Shocks ◽  
Oil Wealth ◽  
Do So

In writing my book, I had two principal and two secondary goals. My principal goals related to Algeria itself: first, to explain the country's peculiar trajectory with political stability and, eventually, its descent into violence, followed by its fascinating restabilization; second, to use the Algerian experience to contribute to the “rentier state” literature and show that oil has not been the “curse” that the “resource curse” folks suggest it to be. My secondary goals had to do with enriching and contextualizing the argument I was making about Algeria. I sought to do so in two ways: by offering “some preliminary comparisons” between Algeria's experience and that of other Middle Eastern oil-exporting states at times of economic shocks, and by cautiously extending the argument about variations in stability in Algeria to account for variations in stability in the four other countries. Four of the five empirical chapters of the book are devoted exclusively to Algeria; a single chapter—what I refer to as “a brief excursion into comparative analysis”—is devoted to Iran, Iraq, Indonesia, and Saudi Arabia and the comparison with Algeria.

scholarly journals Desperate House Sellers: Distress Among Developers

2021 ◽  
Vol 2021 (065) ◽  
pp. 1-68
Author(s):  
Eileen van Straelen ◽  
Keyword(s):  
Capital Markets ◽  
House Price ◽  
Internal Capital Markets ◽  
Housing Crisis ◽  
Economic Shocks ◽  
Price Shocks ◽  
Housing Developments ◽  
Internal Capital

Using granular data on home builder housing developments from the 2006-09 housing crisis, I show that builders spread house price shocks across geographically distinct projects via their internal capital markets. Builders who experience losses in one area subsequently sell homes in unaffected areas at a discount to raise cash quickly. Financially constrained firms are more likely to cut prices of homes in healthy areas in response to losses in unhealthy ones. Firms also smooth shocks across projects only during the crisis and not during the boom. These results together suggest firm internal capital markets spread negative economic shocks across space.

scholarly journals EARLY WARNING SYSTEM OF EXTERNAL SUSTAINABILITY OF AN ECONOMY: CASE OF UKRAINE

2021 ◽  
Vol 4 (39) ◽  
pp. 503-511
Author(s):  
О. Bazhenova ◽  
І. Chornodid ◽  
Yu. Yarmolenko ◽  
О. Golubev
Keyword(s):  
Growth Rate ◽  
Early Warning ◽  
Early Warning System ◽  
Foreign Currency ◽  
Commodity Prices ◽  
Warning System ◽  
Noise Signal ◽  
Sustainability Indicators ◽  
Economic Shocks ◽  
External Sustainability

Abstract. The paper deals with the early warning system that allows monitoring the external sustainability of an economy due to external economic shocks. For this purpose, the analysis of the external sustainability indicators system of an economy (example of Ukraine) was implemented. It consisted of statistical analysis of the system of indicators of external sustainability of an economy, probabilistic assessment of their dynamics due to external economic shocks. The analysis of external sustainability indicators includes verifying their volatility, stability and variability relative to GDP. It means calculation of standard deviation for testing the volatility, autocorrelation to check the stability of the indicator and correlation between its value and GDP growth rate to measure the variability relative to the economy’s performance. The calculations of threshold percentiles for indicators of external sustainability of Ukraine’s economy, noise-signal ratios and probabilities of the occurrence of unsustainable external perturbationsare based on signal approach. The analysis of indicators of external sustainability of Ukraine’s economy shows that most indicators are volatile relative to their average values.It is shown that most indicators of the external sustainability of Ukraine’s economy are acyclic as they are weakly correlated with the growth rate of GDP, although their turning points coincide in many cases. Procyclical indicators are the ratio of reserve assets to «broad money», the ratio of net foreign assets to GDP, the average interest rate on external government liabilities, countercyclical indicators are the ratio of reserve assets to short-term external debt, the share of external public debt denominated in foreign currency to the total amount of external government obligations (except for SDR). Keywords: external sustainability, early warning system of external sustainability, external economic shocks, commodity prices, debt sustainability, social and market efficiency. JEL Classification F30, F40, F62 Formulas: 0; fig.: 1;tabl.: 0; bibl.: 24.

scholarly journals Terms-of-Trade Shocks are Not all Alike

2020 ◽  
Vol 20 (280) ◽  
Author(s):  
Federico Di Pace ◽  
Luciana Juvenal ◽  
Ivan Petrella
Keyword(s):  
Developing Countries ◽  
Business Cycles ◽  
Economic Activity ◽  
Export Price ◽  
Import Price ◽  
Terms Of Trade ◽  
Price Shocks ◽  
Import Prices ◽  
Trade Shocks ◽  
Output Fluctuations

When analyzing terms-of-trade shocks, it is implicitly assumed that the economy responds symmetrically to changes in export and import prices. Using a sample of developing countries our paper shows that this is not the case. We construct export and import price indices using commodity and manufacturing price data matched with trade shares and separately identify export price, import price, and global economic activity shocks using sign and narrative restrictions. Taken together, export and import price shocks account for around 40 percent of output fluctuations but export price shocks are, on average, twice as important as import price shocks for domestic business cycles.

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