EconPapers    
Economics at your fingertips  
 

Global liquidity and commodity market interactions: Macroeconomic effects on a commodity exporting emerging market

Rodrigo da Silva Souza and Renee Fry-McKibbin ()

International Review of Economics & Finance, 2021, vol. 76, issue C, 781-800

Abstract: This paper examines the effects of commodity demand and supply shocks as well as international liquidity shocks on the small open economy of Brazil using an SVAR model. The paper highlights the importance of modelling both types of shocks in the commodity sector. Including only commodity prices overstates the effect of commodity price shocks on the output of Brazil. Commodity demand shocks are much larger than commodity supply shocks in the long run. Including commodity demand and international liquidity also reduces the impact of commodity price shocks on the interest rate made available to Brazil in international capital markets. There is little evidence of Dutch disease for Brazil. However, our results show that Brazil is vulnerable to external shocks.

Keywords: Commodity demand shocks; Commodity supply shocks; Emerging market interest rates; Brazil; Dutch disease; SVAR (search for similar items in EconPapers)
JEL-codes: C51 E32 F43 F62 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1059056021001519
Full text for ScienceDirect subscribers only

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:eee:reveco:v:76:y:2021:i:c:p:781-800

DOI: 10.1016/j.iref.2021.07.008

Access Statistics for this article

International Review of Economics & Finance is currently edited by H. Beladi and C. Chen

More articles in International Review of Economics & Finance from Elsevier
Bibliographic data for series maintained by Catherine Liu ().

 
Page updated 2022-07-27
Handle: RePEc:eee:reveco:v:76:y:2021:i:c:p:781-800