Not All Shocks Are Shared Equally: Commodity Exporters and International Risk Sharing

Emiliano Luttini, Dawit Mekonnen, Valerie Anne Mercer-Blackman and Sørensen, Bent E

No 21100, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: Using world commodity prices as an instrument, this paper proposes a novel method for decomposing channels of international risk sharing for commodity-exporting countries. The method identifies the commodity "sector'' as the projection of gross national product growth on commodity-price growth, and the non-commodity "sector'' as its orthogonal complement. Commodity-price-induced risk is shared significantly more than other risks, in particular via pro-cyclical government savings, but also via counter-cyclical net international factor income.

JEL-codes: F02 F21 F36 Q02 (search for similar items in EconPapers)
Date: 2026-01
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Working Paper: Not All Shocks Are Shared Equally: Commodity Exporters and International Risk Sharing (2026)
Working Paper: Not all Shocks are Shared Equally: Commodity Exporters and International Risk Sharing (2025)
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