Commodity price shocks and the distribution of income in commodity-dependent least-developed countries

Rudiger von Arnim (), Bernhard Tröster, Cornelia Staritz and Werner Raza

Journal of Policy Modeling, 2018, vol. 40, issue 2, 434-451

Abstract: Many least developed countries (LDCs) face commodity dependence on the export and import side. This paper develops a structuralist computable general equilibrium model for commodity-dependent LDCs and simulates global commodity price shocks for Burkina Faso, Ethiopia and Mozambique. Results show important macroeconomic and distributional effects. Although increasing export commodity prices are beneficial, the high correlation with import commodity prices causes low or even negative combined effects. The magnitude of effects depends on the degree of import and export dependence, the production structure of the key commodity sectors and policies that determine the distribution of windfall profits.

Keywords: Economic development; Primary commodities; Commodity dependence; Price volatility; Africa (search for similar items in EconPapers)
JEL-codes: E12 E27 F41 (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (9)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jpolmo:v:40:y:2018:i:2:p:434-451

DOI: 10.1016/j.jpolmod.2018.02.008

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