On the current account - biofuels link in emerging and developing countries: do oil price fluctuations matter?

Gabriel Gomes (), Emmanuel Hache, Valérie Mignon () and Anthony Paris ()
Additional contact information
Gabriel Gomes: EconomiX - EconomiX - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique
Anthony Paris: EconomiX - EconomiX - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique

Working Papers from HAL

Abstract: Many developed countries promote the use of biofuels for environmental concerns, leading to a rise in the price of agricultural commodities utilized in their production. Such environmental policies have major effects on the economy of emerging and developing countries whose activity is highly dependent on agricultural commodities involved in biofuel production. This paper tackles this issue by examining the price impact of biofuels on the current account for a panel of 16 developing and emerging countries, and the potential nonlinear effect exerted by the price of oil on this relationship. Relying on the estimation of panel smooth-transition regression models, we show that positive shocks in the price of biofuels lead to a current-account improvement for agricultural commodity exporters and producers only when the price of oil is below a certain threshold. When the price of oil exceeds this threshold, uctuations in the price of biofuels no longer affect the current account. These findings illustrate that a rise in the price of oil exerts a negative effect on the trade balance of commodity exporters which are also oil importers, dampening the biofuel price impact on the current-account position.

Keywords: Biofuels; Oil; Current account; Panel smooth transition regression (search for similar items in EconPapers)
Date: 2017
Note: View the original document on HAL open archive server: https://hal.science/hal-04141639
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://hal.science/hal-04141639/document (application/pdf)

Related works:
Journal Article: On the current account - biofuels link in emerging and developing countries: do oil price fluctuations matter? (2018)
Working Paper: On the current account-biofuels link in emerging and developing countries: do oil price fluctuations matter? * (2018)
Working Paper: On the Current Account - Biofuels Link in Emerging and Developing Countries: Do Oil Price Fluctuations Matter? (2017)
Working Paper: On the current account - biofuels link in emerging and developing countries: do oil price fluctuations matter? (2017)
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:hal:wpaper:hal-04141639

Access Statistics for this paper

More papers in Working Papers from HAL
Bibliographic data for series maintained by CCSD ().