IMF Working Papers

Fiscal Policy, the Real Exchange Rate and Commodity Prices

By Carmen Reinhart

October 1, 1990

Preview Citation

Format: Chicago

Carmen Reinhart. Fiscal Policy, the Real Exchange Rate and Commodity Prices, (USA: International Monetary Fund, 1990) accessed November 21, 2024
Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

The role of the international commodity market in transmitting disturbances is considered in a model that incorporates commodities as an input in production. The analysis employs a three-country framework: a liquidity-constrained commodity supplier and two industrial countries that import the commodity, export differentiated manufactured goods and hold the outstanding debt of the commodity exporter. In this setting the impact of changes in fiscal policy, commodity supplies, and the real interest rate are assessed. Particular attention is paid to the responses of the real exchange rate, commodity prices, and the international distribution of debt to the various shocks.

Subject: Commodities, Commodity prices, Consumption, Fiscal policy, Foreign exchange, National accounts, Prices, Real exchange rates

Keywords: Commodity exporter, Commodity index, Commodity input, Commodity prices, Commodity supplier, Consumption, Debtor country, Developing country, Home good, Real exchange rates, World commodity supply, WP

Publication Details

  • Pages:

    20

  • Volume:

    ---

  • DOI:

    ---

  • Issue:

    ---

  • Series:

    Working Paper No. 1990/091

  • Stock No:

    WPIEA0911990

  • ISBN:

    9781451851434

  • ISSN:

    1018-5941

Notes

Also published in Staff Papers, Vol. 38, No. 3, September 1991.

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