Shocks and Shields: Macroeconomic Institutions During Commodity Price Swings

Rabah Arezki, Patrick Imam, Kangni Kpodar and Dao Le Van
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Rabah Arezki: John F. Kennedy School of Government - Harvard University, CERDI - Centre d'Études et de Recherches sur le Développement International - IRD - Institut de Recherche pour le Développement - CNRS - Centre National de la Recherche Scientifique - UCA - Université Clermont Auvergne, FERDI - Fondation pour les Etudes et Recherches sur le Développement International
Kangni Kpodar: International Monetary Fund (IMF)
Dao Le Van: HCMIU - Ho Chi Minh City International University [Vietnam National University, HCM] - VNU-HCM - Vietnam National University, Ho Chi Minh City / Đại học Quốc gia TP. Hồ Chí Minh

Working Papers from HAL

Abstract: Countries facing commodity (net) export price shocks tend to implement fiscal rules and to financially close their economies, demonstrating "macroeconomic prudence". These effects are (unsurprisingly) asymmetric between import and export price shocks. The impact of commodity (net) export prices on macroeconomic institutions is influenced by the intensity of shocks and income levels of the countries, with higher-income countries driving the main results. These findings remain robust across various checks, including different estimators and additional control and dependent variables. These findings suggest that macroeconomic institutions are reactive to terms of trade shocks stemming from commodity price fluctuations.

Keywords: Resource curse; Natural resources; Macroeconomics; Macroeconomic institutions; Commodity prices (search for similar items in EconPapers)
Date: 2026-04-27
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Persistent link: https://EconPapers.repec.org/RePEc:hal:wpaper:hal-05603657

DOI: 10.5089/9798400296710.001

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