What drives the current account in commodity exporting countries? the cases of Chile and New Zealand by Juan Pablo Medina Guzman

Cover of: What drives the current account in commodity exporting countries? | Juan Pablo Medina Guzman

Published by Bank for International Settlements in Basel, Switzerland .

Written in English

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This paper uses an open economy DSGE model with a commodity sector and nominal and real rigidities to ask what factors account for current account developments in two small commodity exporting countries. We estimate the model, using Bayesian techniques, on Chilean and on New Zealand data, and investigate the structural factors that explain the behaviour of the two countries" current accounts. We find that foreign financial conditions, investment-specific shocks, and foreign demand account for the bulk of the variation of the current accounts of the two countries. In the case of New Zealand fluctuations in commodity export prices have also been important. Monetary and fiscal policy shocks (deviations from policy rules) are estimated to have relatively small e ects on the current account.We find interesting differences in Chilean and New Zealand responses to some shocks, despite similarities between the two economies and the common structural model employed.

Edition Notes

Book details

Statementby Juan Pablo Medina, Anella Munro and Claudio Soto.
SeriesBIS working papers -- no. 247
ContributionsMunro, Anella, 1964-, Soto, Claudio., Bank for International Settlements. Monetary and Economic Dept.
Classifications
LC ClassificationsHG3879
The Physical Object
FormatElectronic resource
ID Numbers
Open LibraryOL22649186M
LC Control Number2008613031

Download What drives the current account in commodity exporting countries?

Downloadable. This paper uses an open economy DSGE model with a commodity sector and nominal and real rigidities to ask what factors account for current account developments in two small commodity exporting countries.

We estimate the model, using Bayesian techniques, on Chilean and on New Zealand data, and investigate the structural factors that explain the behaviour of the two countries.

What Drives the Current Account in Commodity Exporting Countries. The Cases of Chile and New Zealand sector and nominal and real rigidities to ask what factors account for current account developments in two small commodity exporting countries.

We estimate the model, using Bayesian techniques, on Chilean and on New Zealand data, and Cited by: CiteSeerX - Document Details (Isaac Councill, Lee Giles, Pradeep Teregowda): This paper uses an open economy DSGE model with a commodity sector and nominal and real rigidities to ask what factors account for current account developments in two small commodity exporting countries.

We estimate the model, using Bayesian techniques, on Chilean and on New. Downloadable. This paper uses a DSGE model to explore what factors explain current account developments in Chile and New Zealand, two small open economies that are intensive commodity exporters.

The model estimation shows that investment-specific shocks, foreign financial changes, and foreign demand shocks account for the bulk of the variation in the current accounts of the two countries. What drives the current account in commodity exporting countries. The cases of Chile and New Zealand.

Juan Medina (), Anella Munro and Claudio Soto (). NoBIS Working Papers from Bank for International Settlements Abstract: This paper uses an open economy DSGE model with a commodity sector and nominal and real rigidities to ask what factors account for current account Cited by: What Drives the Current Account in Commodity Exporting Countries.

sector and nominal and real rigidities to ask what factors account for current account developments in two small commodity exporting countries. We estimate the model, using Bayesian techniques, on Chilean and on New Zealand data, and investigate the structural factors that.

Request PDF | What Drives the Current Account in Commodity Exporting Countries. The Cases of Chile and New Zealand | Monetary policies of the ECB and US Fed can be characterised by Taylor rules. We \u85nd that foreign \u85nancial conditions, investment-speci\u85c shocks, and foreign demand account for the bulk of the variation of the current accounts of the two countries.

In the case of New Zealand uctuations in commodity export prices have also been important. two small commodity-exporting countries. Seven domestic shocks and three external shocks are considered to explain current account ⁄uctuations. These include variations in foreign –nancial conditions, foreign demand, export commodity prices, productivity and investment-speci–c shock and macroeconomic policy.

CiteSeerX - Document Details (Isaac Councill, Lee Giles, Pradeep Teregowda): As capital markets have become increasingly integrated, savings and investment within countries have tended to become less correlated, in what is known as the Feldstein-Horioka () correlation, with the corollary that savings-investment gaps (that is, current accounts) have tended to.

Commodity exporting countries in Latin America have benefited strongly from the commodity price boom that began around And the accompanying improvements in public and external balance sheets have fed a sense that this time the macroeconomic response to the terms-of-trade boom has been different (and more prudent) than in past episodes.

What Drives the Current Account in Commodity-Exporting Countries. The Cases of Chile and New Zealand Article (PDF Available) in Economia Chilena 10(3).

Today the world aggregate current account balances as a share of global output are twice as large as in mids, while the net foreign asset positions have boosted up threefold (Bracke et al. ).Global current account imbalance is also rising with the USA and other major developed economies running a persistent current account deficit against some emerging market countries.

The commodity-exporting countries that belong to the same panel can be heterogeneous based on the type of main commodity exported by the country. Second, the literature has shown that the impact of commodity prices on the exchange rate, if it exists, can be non-linear through the transition variable of the commodity terms of trade or oil price.

Commodity export booms in developing countries (English) Abstract. This article surveys the experiences of commodity-exporting countries faced with resource discoveries and widely fluctuating world prices.

Poor boom management leads to major internal and external economic imbalances. Many developing countries overconsume. The World Commodity Exporters Database is a collection of key macro-fiscal indicators covering 51 countries that are exporters of oil, gas, and metals.

Motivated by the absence of conclusive guidance from the current literature, this study revisits the effects of terms of trade shocks on real effectiv. The current account records a nation's transactions with the rest of the world – specifically its net trade in goods and services, net earnings.

All of the import and export codes used by the U.S. are based on the HTS. The HTS assigns six-digit codes for general categories. Countries that use the HTS are allowed to define commodities at a more detailed level than six digits, but all definitions must be within that six-digit framework.

The U.S. defines products using digit HTS codes. Algeria recorded a Current Account deficit of USD Billion in the first quarter of Current Account in Algeria averaged USD Billion from untilreaching an all time high of USD Billion in the fourth quarter of and a record low of USD Billion in the first quarter of This page provides - Algeria Current Account - actual values, historical.

U.S. export control regulations control whether certain commodities, software and information can be transmitted outside the U.S.

Before arranging for items to be shipped or conveyed (electronically or otherwise) outside the U.S., these laws and regulations should be reviewed. Merchandise Trade summary statistics data for World (All Countries) including exports and imports, applied tariffs, top exporting and importing countries, effectively applied and MFN tariff along with most exported and imported product groups, along with development indicators such as GDP, GNI per capita, trade balance and trade as percentage of GDP for year.

Dark blue shading represents countries where oil is the biggest export and shows the importance of oil not just in the Middle East, but across Asia and Africa and South America. Other commodities, including precious metals and minerals, also play a significant role in the global economy.

Angola recorded a Current Account surplus of USD Million in Current Account in Angola averaged USD Million from untilreaching an all time high of USD Million in and a record low of USD Million in This page provides - Angola Current Account - actual values, historical data, forecast, chart, statistics, economic.

Interesting observations about Economy > Exports > Commodities Factoid #22 The top nations for per capita imports and exports tend to be very small. Part One: Why Commodity Prices are a Problem for Developing Countries 1. Introduction 1 2. The Nature of the Problem 3 3.

Trends in Prices 5 4. Characteristics of Commodities and Markets 9 Part Two: Policies to Help Commodity-Dependent Countries 5. Reducing Dependence on Commodities 15 Successful attempts at diversification away from commodities.

when they hear the word ‘commodity’ and they are more likely to talk about financial markets, Wall Street and speculation.

While it is true that commodity markets can be volatile, and a certain breed of financial trader will always be attracted by that, this conception is a world away from the complex, intensely practical business. World’s Top Import Products. The world’s top imports by product and leading buyer countries reveal the commodities most in demand on international market and the location for the most lucrative opportunities for selling to foreign purchasers.

Crude oil: $ billion (Down % from to ). • External balances of net commodity importers have deteriorated. The first round effect on current account balances exceeded 1 percent of GDP in some developing countries. With most of the increase in prices of grains and oil in the 2nd half ofexternal balances in some LICs may deteriorate significantly in What Drives the Current Account in Commodity Exporting Countries.

The Cases of Chile and New Zealand by Juan Pablo Medina & Anella Munro & Claudio Soto; The Chilean Business Cycles Through the Lens of a Stochastic General Equilibrium Model by Juan Pablo Medina & Claudio Soto; The "great moderation" and the monetary transmission mechanism in Chile.

Commodity trade, the international trade in primary goods. Such goods are raw or partly refined materials whose value mainly reflects the costs of finding, gathering, or harvesting them; they are traded for processing or incorporation into final goods.

Examples include crude oil, cotton, rubber, grains, and metals. "Coping with commodity price volatility: an idea for exporting countries," GlobalDev, Feb. 8, "Four Proposals to Help Commodity-Exporters Cope with Price Volatility," VoxEU, Oct, “Policies for Managing External Shocks in Commodity-Exporting Countries,“ ppt, Conference on Current Account Sustainability, Inter-American Development Bank, Ap "How Commodity.

The current slump in commodity prices has caught many commodity exporters by surprise because for years the demand for their products had surged, thanks to the rapid economic growth of China. In top importing countries were United States, China, Germany, Hong Kong, China and United Kingdom and exporting countries were China, United States, Germany, Japan and Korea, Rep.

Country. Year/Range. Trade Flow. Indicator. Please note the exports, imports and tariff data are based on reported data and not gap filled. BETWEEN and broad indices of commodity prices tripled, easily outpacing global growth. S ince then prices have changed course.

Some commodities have endured ferocious price falls: oil. Goods imported from one country can be exported to another country. This is one type of external trade and is called entrepôt trade. External trade can be categorised as: a) Import trade b) Export trade c) Entrepôt trade.

Under entrepôt trade a pe. Ranked: Countries with the Best and Worst Pension Plans. The global population is aging—byone in six people will be over the age of As our aging population nears retirement and gets closer to cashing in their pensions, countries need to ensure their pension systems can withstand the extra strain.

This graphic uses data from the Melbourne Mercer Global Pension. Since Septemberthe price of Brent crude oil, the global benchmark, has plummeted from around $ (£70) a barrel to below $30 this for other commodities, such as copper and.

global financial system, and a large exposure of the current account to terms of trade effects. This description applies especially to commodity exporting countries, subject to large terms of trade shocks. While favorable terms of trade shocks tend to induce real appreciation and capital inflows, the downturns associated with adverse shocks impose.

While developing countries as a group more than doubled their share of world manufacturing exports from per cent in to per cent intheir share of manufacturing value added increased by less than half, from per cent to per cent.

This Map Shows the highest value export product details by country.Components. The current account shows the net amount of a country's income if it is in surplus, or spending if it is in deficit.

It is the sum of the balance of trade (net earnings on exports minus payments for imports), factor income (earnings on foreign investments minus payments made to foreign investors) and unilateral transfers.

These items include transfers of goods and services .As Table 4 shows, the share in world agricultural commodity exports of the 43 countries as a group has declined sharply, from 7 percent in to percent inreflecting slower growth in their commodity export earnings than growth in exports of the rest of the world.

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