What moves commodity terms-of-trade? Evidence from 178 countries

Makhlouf, Y., Kellard, N. M. and Vinogradov, D. (2023) What moves commodity terms-of-trade? Evidence from 178 countries. Journal of Commodity Markets, 32, 100359. (doi: 10.1016/j.jcomm.2023.100359)

Abstract

Despite the important impact of commodity terms-of-trade (CTOT) on GDP growth, child mortality rates and public debt, little is known about its determinants. Using data from 178 countries (grouped according to their commodity export-import structure) over the period 1962 to 2020, we examine the short-and long-run effects of global economic activity, OECD and emerging markets growth, the exchange rate of U.S. dollar, stock price volatility and real interest rates on CTOT growth. We demonstrate their typical asymmetric effect on exporters and importers, and show, for example, that the exchange rate of the U.S. dollar also exhibits opposite effects over the short and long run due to inelastic commodity demand. We find that the growth of emerging market economies provides the most universal and consistent effect across all of our subsamples (i.e., energy and non-energy exporters and importers) - this latter point underscores the contemporary global importance of developing countries' growth.

• Item Type: Articles
• Status: Published
• Refereed: Yes
• Glasgow Author(s) Enlighten ID: Vinogradov, Professor Dmitri

Creator Roles

Vinogradov, D.: Conceptualization, Formal analysis, Writing – original draft, Writing – review and editing

• Authors: Makhlouf, Y., Kellard, N. M., and Vinogradov, D.
• College/School: College of Social Sciences > Adam Smith Business School > Accounting and Finance
• Journal Name: Journal of Commodity Markets
• Publisher: Elsevier
• ISSN: 2405-8513
• ISSN (Online): 2405-8505
• Published Online: 11 September 2023
• Copyright Holders: Copyright © 2023 Elsevier
• First Published: First published in Journal of Commodity Markets 32:100359
• Publisher Policy: Reproduced in accordance with the copyright policy of the publisher