Macroeconomic and Sectoral Effects of Terms-of-Trade Shocks: The Experience of the Oil-Exporting Developing Countries

1999 ◽  
Author(s):  
Nikola Spatafora ◽  
Andrew M. Warner
Keyword(s):  
Developing Countries ◽  
Terms Of Trade ◽  
Trade Shocks

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.

External terms-of-trade and labour market imperfections in developing countries

2018 ◽  
Vol 11 (1) ◽  
pp. 22-33
Author(s):  
Sarbajit Chaudhuri ◽  
Anindya Biswas
Keyword(s):  
Developing Countries ◽  
Labour Market ◽  
Full Employment ◽  
Empirical Studies ◽  
Terms Of Trade ◽  
Content Type ◽  
Trade Shocks ◽  
Welfare Consequence ◽  
Analytical Result ◽  
Developed Nations

Purpose Some recent empirical studies have found that developing countries are more prone to external terms-of-trade shocks compared to developed nations. With this background, the purpose of this paper is to the question of whether developing countries possess any built-in mechanism that can cope with external terms-of-trade (TOT) shocks both theoretically and empirically. Design/methodology/approach This paper uses a two-sector, full-employment general equilibrium model with endogenous labour market distortion to conduct its theoretical analysis and then uses an annual panel dataset of 13 small developing countries over the recent time period of 2000-2012 to substantiate its theoretical findings. Findings Theoretically, this study finds that developing countries possess an inherent shock-absorbing mechanism that stems from their peculiar institutional characteristics and can lessen the gravity of detrimental welfare consequence of exogenous TOT movements. This analytical result has been found to be empirically valid based on a panel dataset of 13 countries from 2000-2012. Originality/value The authors’ analyses suggest that that the developing countries should take utmost caution before adopting the policy of labour market reform because these might impair the effectiveness of their in-built shock-absorbing mechanism against adverse international price movements.

scholarly journals Private Saving and Terms of Trade Shocks: Evidence From Developing Countries

1991 ◽  
Vol 91 (100) ◽  
pp. 1 ◽  
Author(s):  
Jonathan David Ostry ◽  
Carmen Reinhart ◽  
◽  
Keyword(s):  
Developing Countries ◽  
Terms Of Trade ◽  
Trade Shocks ◽  
Private Saving

The Distributive Impact of Terms of Trade Shocks

2017 ◽  
Author(s):  
Maurizio Bussolo ◽  
Patrizia Luongo
Keyword(s):  
Terms Of Trade ◽  
Trade Shocks
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