Developing countries are over-reliant on primary commodities for their export revenues. As the prices of these goods are highly volatile and set in world markets, they are a major source of economic instability. Moreover, commodity price rises appreciate the exchange rate, making the manufacturing sector, the key driver of long-run economic growth, less competitive and thereby harming future living standards.
Most of the research in this area has been either theoretical or empirical; this project will combine both to quantify the economic consequences of commodity price volatility as well as consider the potential stabilising role of fiscal and monetary policies in responding to swings in commodity prices.
New research into the economic consequences of commodity price volatility
