Currency Crises In Emerging Countries: The Commodity Factor

Vincent Bodart and Jean-François Carpantier

No 2021003, LIDAM Discussion Papers IRES from Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES)

Abstract: In this paper, we explore whether falls in commodity prices can explain the simultaneous occurence of currency crises in emerging and developing countries. For our empirical analysis, we use a panel of 104 emerging and developing countries, covering the period 1970-2018. Using event studies, we find that currency crises in commodity dependent countries are preceded by commodity price growth 2 to 4 percentage points below normal. In addition, using Poisson regression analysis, we find that a 10% decrease in global commodity price indices leads to a rise of about 7% in the number of currency crises hitting commodity exporting countries.

Keywords: Currency crises; Commodity prices; Commodity dependence; Commodity currencies (search for similar items in EconPapers)
JEL-codes: C32 C33 E31 F32 (search for similar items in EconPapers)
Date: 2020-10-08
New Economics Papers: this item is included in nep-cwa and nep-mac
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Journal Article: Currency crises in emerging countries: The commodity factor (2023)
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Persistent link: https://EconPapers.repec.org/RePEc:ctl:louvir:2021003

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