EconPapers    
Economics at your fingertips  
 

Trade in Commodities and Emerging Market Business Cycles

Hakon Tretvoll, Fernando Leibovici () and David Kohn ()
Additional contact information
Hakon Tretvoll: BI Norwegian Business School

No 743, 2017 Meeting Papers from Society for Economic Dynamics

Abstract: This paper studies the role of the sectoral composition of production and trade in accounting for emerging market business cycles. We document that in emerging economies the production of commodities is a larger share of total production than in developed ones, and that they run larger sectoral and aggregate trade imbalances. We set up a small open economy model that produces commodities and manufactures and trades them with the rest of the world. We contrast the implied business cycle dynamics of two economies that are respectively calibrated to match the observed differences between developed and emerging countries. In the model, shocks to the relative price of commodities lead to much larger fluctuations in output, net exports and TFP in the emerging economy, accounting for the higher volatility that we observe in the data. A key driver of these effects is that emerging economies consume relatively more manufactures than they produce.

Date: 2017
New Economics Papers: this item is included in nep-dge, nep-int and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed

Downloads: (external link)
https://economicdynamics.org/meetpapers/2017/paper_743.pdf (application/pdf)

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:red:sed017:743

Access Statistics for this paper

More papers in 2017 Meeting Papers from Society for Economic Dynamics Society for Economic Dynamics Marina Azzimonti Department of Economics Stonybrook University 10 Nicolls Road Stonybrook NY 11790 USA. Contact information at EDIRC.
Bibliographic data for series maintained by Christian Zimmermann ().

 
Page updated 2020-09-11
Handle: RePEc:red:sed017:743