A1 Journal article (refereed)
Assessing the Commodity Market Price and Terms of Trade Exposures of Macroeconomy in Emerging and Developing Countries (2022)

Boakye, E. O., Heimonen, K., & Junttila, J. (2022). Assessing the Commodity Market Price and Terms of Trade Exposures of Macroeconomy in Emerging and Developing Countries. Emerging Markets Finance and Trade, 58(8), 2243-2257. https://doi.org/10.1080/1540496x.2021.1971074

JYU authors or editors

Publication details

All authors or editors: Boakye, Ernest Owusu; Heimonen, Kari; Junttila, Juha

Journal or series: Emerging Markets Finance and Trade

ISSN: 1540-496X

eISSN: 1558-0938

Publication year: 2022

Publication date: 11/10/2021

Volume: 58

Issue number: 8

Pages range: 2243-2257

Publisher: Routledge

Publication country: United States

Publication language: English

DOI: https://doi.org/10.1080/1540496x.2021.1971074

Publication open access: Openly available

Publication channel open access: Partially open access channel

Publication is parallel published (JYX): https://jyx.jyu.fi/handle/123456789/78299

Additional information: Available at SSRN: https://ssrn.com/abstract=3741628 or http://dx.doi.org/10.2139/ssrn.3741628

Abstract

This paper provides novel evidence on commodity market exposure, i.e., the impacts of commodity price and terms of trade fluctuations on macro performance amongst 46 emerging and developing countries (EMDCs) in Africa, Asia and the Latin American and Caribbean (LAC) region. We estimate the exposure of six macroeconomic variables to the commodity prices and terms of trade. Our results indicate that in overall terms, there is a strong and statistically significant long-run relationship between the vector of analyzed world trade prices and macro variables in all EMDCs. However, based on the short-term reactions, only about 10% of the macroeconomic variation amongst the EMDCs is due to commodity market-related exposures. Our results also indicate that the commodity market exposure is not unanimous across countries, amongst regions, or especially between measures of exposure.

Keywords: emerging markets; macroeconomy; commodities; price development; international market; international trade; economic effects

Free keywords: Commodity prices; terms of trade; structural vector autoregression; emerging and developing countries

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Related projects

Ministry reporting: Yes

Reporting Year: 2022

JUFO rating: 1