Fiscal Policy, the Real Exchange Rate and Commodity Prices

Carmen Reinhart

No 1990/091, IMF Working Papers from International Monetary Fund

Abstract: The role of the international commodity market in transmitting disturbances is considered in a model that incorporates commodities as an input in production. The analysis employs a three-country framework: a liquidity-constrained commodity supplier and two industrial countries that import the commodity, export differentiated manufactured goods and hold the outstanding debt of the commodity exporter. In this setting the impact of changes in fiscal policy, commodity supplies, and the real interest rate are assessed. Particular attention is paid to the responses of the real exchange rate, commodity prices, and the international distribution of debt to the various shocks.

Keywords: WP; developing country; world commodity supply; commodity supplier; commodity exporter; debtor country; commodity input; home good; commodity index; Real exchange rates; Commodity prices; Consumption (search for similar items in EconPapers)
Pages: 20
Date: 1990-10-01
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Citations: View citations in EconPapers (3)

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Related works:
Journal Article: Fiscal Policy, the Real Exchange Rate, and Commodity Prices (1991)
Working Paper: Fiscal Policy, the Real Exchange Rate, and Commodity Prices (1991)
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Persistent link: https://EconPapers.repec.org/RePEc:imf:imfwpa:1990/091

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