Reinhart, Carmen (1990): Fiscal policy, the real exchange rate and commodity prices: A global framework. Published in: IMF Staff Papers , Vol. 38, No. 3 (September 1991): pp. 508-524.
Download (5Mb) | Preview
The role of the international commodity market in transmitting disturbances is considered in a model that incorporates commodities as an input in production. The analysis employs a three-country framework: a liquidity-constrained commodity supplier and two industrial countries that import the commodity, export differentiated manufactured goods and hold the outstanding debt of the commodity exporter. In this setting the impact of changes in fiscal policy, commodity supplies, and the real interest rate are assessed. Particular attention is paid to the responses of the real exchange rate, commodity prices, and the international distribution of debt to the various shocks.
|Item Type:||MPRA Paper|
|Original Title:||Fiscal policy, the real exchange rate and commodity prices: A global framework|
|Keywords:||commodity prices fiscal policy world demand real exchange rate debt|
|Subjects:||F - International Economics > F4 - Macroeconomic Aspects of International Trade and Finance > F40 - General
F - International Economics > F4 - Macroeconomic Aspects of International Trade and Finance > F42 - International Policy Coordination and Transmission
F - International Economics > F4 - Macroeconomic Aspects of International Trade and Finance > F41 - Open Economy Macroeconomics
|Depositing User:||Carmen Reinhart|
|Date Deposited:||16. Mar 2009 15:01|
|Last Modified:||17. Feb 2013 16:55|
Aghevli, B. B., J. M. Boughton, P. J. Montiel, D. Villanueva, and G. Woglom, "The Role of National Saving in the World Economy," IMF Occasional Paper Number 67, (1990).
Antonini, A., "Price and Inventory Dynamics of Primary Commodities: An Empirical Analysis," Mimeo, (1987).
Aizenman, J. and Borensztein, E. R., "Debt and Conditionalily Under Endogenous Terms of Trade," NBER Working Paper 2582, (1988).
Blanchard, 0. J., "Debt, Deficits, and Finite Horizons," Journal of Political Economy, (1985), pp. 223-247.
Buiter, W. H., "Fiscal Policies in Open, Interdependent Economies," in Economic Policy in Theory and Practice, A. Razin and E. Sadka eds., (Macmillan, London), (1986).
Dornbusch, R., "Policy and Performance Links between LDC Debtor and Industrial Nations," Brookings Papers on Economic Activity. (1985), pp. 303-356.
Frenkel, J. A. and M. Mussa, "Asset Markets, Exchange Rates and the Balance of Payments," in Handbook of International Economics. Vol. 2, R.W. Jones and P. B. Kenen eds.,(Amsterdam: North-Holland), (1985).
Frenkel, J. A. and A, Razin, "Fiscal Policies, Debt, and International Economic Interdependence," NBER Working Paper Number 1266, (1984).
Gilbert, C. L., "The Impact of Exchange Rates and Developing Country Debt on Commodity Prices," The Economic Journal. (1989), pp. 773-784.
Giovannini, A., "The Real Exchange Rate, the Capital Stock, and Fiscal Policy," European Economic Review. (1988), pp. 1747-1767.
Guidotti, P. E. and C. A. Vegh, "Macroeconomic Interdependence under Capital Controls: A Two-Country Model of Dual Exchange Rates," IMF Working Paper Number 74, (1988).
Haque, N. U. and P. Montiel, "Consumption in Developing Countries: Tests for Liquidity Constraints and Finite Horizons," Review of Economics and Statistics, (1989), pp. 408-415.
Krugman, P., "Oil and the Dollar," in Economic Interdependence and Flexible Rates, J. Bhandari and B. Putnam eds., (NBER), (1983).
, "Oil Shocks and Exchange Rate Dynamics," in Exchange Rates and International Macroeconomics, J. Frenkel ed., (NBER), (1983).
Metzler, L. A., "Tariffs, the Terms of Trade, and the Distribution of National Income," Journal of Political Economy. (1949), pp. 1-29.
Morrison, T. and M. Wattleworth, "The 1984-86 Commodity Recession: An Analysis of the Underlying Causes," IMF Working Paper Number 71,(1987).
Mundell, R. A., "Capital Mobility and Stabilization Policy Under Fixed and Flexible Exchange Rates," in International Economics. (Macraillan, New York), (1968).
Obstfeld, M. , "Macroeconomic Policy, Exchange Rate Dynamics, and Optimal Asset Acuumulation," Journal of Political Economy, (1981), pp. 1142-1161.
Reinhart, C. M. , "Commodity Markets and the International Transmission of Shocks," IMF Working Paper Number 104, (1988).
Rossi, N. , "Government Spending, the Real Interest Rate, and the Behavior of Liquidity-Constrained Consumers in Developing Countries," IMF Staff Papers. (1988), pp. 104-140.
Stockman, A. C., "Fiscal Policies and International Financial Markets," mimeo, (1985).