On the asymmetric effect of commodity terms of trade shocks on growth in commodity-dependent countries: Does the choice of exchange rate regimes matter?

Moustapha Dembélé (), Issiaka Coulibaly (), Zhou Qingjie () and Xiao Hao ()
Additional contact information
Moustapha Dembélé: Beijing Technology and Business University, and Hunan University
Issiaka Coulibaly: African Development Bank
Zhou Qingjie: Beijing Technology and Business University
Xiao Hao: Hunan University, Institute of African Studies

Economics Bulletin, 2026, vol. 46, issue 1, 79 - 92

Abstract: This paper analyzes the asymmetric effects of commodity terms-of-trade shocks on economic growth in resource-dependent economies, with a focus on exchange rate regimes. Using panel data and appropriate estimators, the study finds that negative shocks significantly reduce growth, while positive shocks do not consistently yield benefits — especially in agriculture-based countries. The exchange rate regime plays a key role: fixed regimes absorb shocks faster but risk competitiveness losses, while flexible regimes offer more adjustment capacity but face greater volatility. These findings highlight the need for tailored macroeconomic policies to enhance resilience to external shocks.

Keywords: Commodity terms of trade shocks; growth; exchange rate regimes; commodity dependence (search for similar items in EconPapers)
JEL-codes: F3 O2 (search for similar items in EconPapers)
Date: 2026-03-30
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.accessecon.com/Pubs/EB/2026/Volume46/EB-26-V46-I1-P9.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ebl:ecbull:eb-25-00178

Access Statistics for this article

More articles in Economics Bulletin from AccessEcon
Bibliographic data for series maintained by John P. Conley ().