Effect of Sovereign Wealth Funds in Commodity-Exporting Economies when Commodity Prices Affect Interest Spreads

Shigeto Kitano and Kenya Takaku
Additional contact information
Kenya Takaku: Faculty of International Studies, Hiroshima City University, JAPAN

No DP2021-22, Discussion Paper Series from Research Institute for Economics & Business Administration, Kobe University

Abstract: We reconsider the role of a sovereign wealth fund in commodity-exporting economies facing recent volatile fluctuations of commodity prices due to the COVID-19 shock. We examine the welfare-improving effect of a sovereign wealth fund from the new perspective of the link between commodity prices and interest rate spreads, which is unique to emerging economies. We show that a sovereign wealth fund becomes more effective in improving welfare for commodity-exporting economies with a stronger link between their commodity prices and interest rate spreads.

Keywords: Sovereign wealth fund; Commodity prices; Interest rate spreads; DSGE model; Financial frictions; Emerging economies (search for similar items in EconPapers)
JEL-codes: E32 E44 F32 O20 Q48 (search for similar items in EconPapers)
Pages: 40 pages
Date: 2021-10, Revised 2023-08
New Economics Papers: this item is included in nep-dge, nep-fdg and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.rieb.kobe-u.ac.jp/academic/ra/dp/English/DP2021-22.pdf Revised version, 2021 (application/pdf)

Related works:
Journal Article: Effect of sovereign wealth funds in commodity‐exporting economies when commodity prices affect interest spreads (2023)
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:kob:dpaper:dp2021-22

Access Statistics for this paper

More papers in Discussion Paper Series from Research Institute for Economics & Business Administration, Kobe University 2-1 Rokkodai, Nada, Kobe 657-8501 JAPAN. Contact information at EDIRC.
Bibliographic data for series maintained by Office of Promoting Research Collaboration, Research Institute for Economics & Business Administration, Kobe University ().