Commodity Prices: Cyclical Weakness or Secular Decline?

Primary commodities still account for the bulk of exports in many developing countries. However, real commodity prices have been declining almost continuously since the early 1980s and there is evidence of renewed weakness. The appropriate policy response to a terms of trade shock depends importantl...

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Bibliographic Details
Main Author: Wickham, Peter (Author)
Format: Electronic eBook
Language:English
Published: Washington, D.C International Monetary Fund 1994
Series:IMF Working Papers Working Paper No. 94/7
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Summary:Primary commodities still account for the bulk of exports in many developing countries. However, real commodity prices have been declining almost continuously since the early 1980s and there is evidence of renewed weakness. The appropriate policy response to a terms of trade shock depends importantly on whether the shock is perceived to be temporary or permanent. Our results indicate that the recent weakness in commodity prices is mostly of a secular nature, stressing the need for commodity exporting countries to concentrate on export diversification and other structural policies. There is, however, scope for stabilization funds and the use of hedging strategies since the evidence also suggests commodity prices have become more volatile
Physical Description:1 Online-Ressource (58 p)
ISBN:1451842376
9781451842371

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