Global Cycles: Capital Flows, Commodities, and Sovereign Defaults, 1815–2015

Capital flow and commodity cycles have long been connected with economic crises. Sparse historical data, however, has made it difficult to connect their timing. We date turning points in global capital flows and commodity prices across two centuries and provide estimates from alternative data sources. We then document a strong overlap between the ebb and flow of financial capital, the commodity price super-cycle, and sovereign defaults since 1815. The results have implications for today, as many emerging markets are facing a double bust in capital inflows and commodity prices, making them vulnerable to crises.

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Global Cycles: Capital Flows, Commodities, and Sovereign Defaults, 1815-2015

10.3386/w21958 ◽

2016 ◽

Cited By ~ 1

Author(s):

Carmen Reinhart ◽

Vincent Reinhart ◽

Christoph Trebesch

Keyword(s):

Capital Flows ◽

Sovereign Defaults ◽

Global Cycles

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Global Cycles: Capital Flows, Commodities, and Sovereign Defaults, 1815-2015

SSRN Electronic Journal ◽

10.2139/ssrn.2744551 ◽

2016 ◽

Author(s):

Carmen Reinhart ◽

Vincent R. Reinhart ◽

Christoph Trebesch

Keyword(s):

Capital Flows ◽

Sovereign Defaults ◽

Global Cycles

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What Drives Global Capital Flows?

10.1057/9780230627291 ◽

2006 ◽

Author(s):

Brendan Brown

Keyword(s):

Capital Flows ◽

Global Capital

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Global Capital Flows and Investments in Real Estate Office Markets in Global Financial Cities.

10.15396/eres2018_122 ◽

2018 ◽

Author(s):

Michael McCord ◽

Stanley McGreal ◽

Jim Berry ◽

Olawumi Fadeyi

Keyword(s):

Real Estate ◽

Capital Flows ◽

Global Capital ◽

Office Markets

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Capital Flows to Developing Countries: Blessing or Curse? (Distinguished Lecture)

The Pakistan Development Review ◽

10.30541/v37i4ipp.125-151 ◽

1998 ◽

Vol 37 (4I) ◽

pp. 125-151 ◽

Cited By ~ 1

Author(s):

Mohsin S. Khan

Keyword(s):

Developing Countries ◽

Capital Flows ◽

Financial Integration ◽

Foreign Capital ◽

Foreign Debt ◽

Capital Inflows ◽

Private Capital ◽

Policy Responses ◽

Private Capital Flows ◽

Significant Phenomenon

The surge of private capital flows to developing countries that occurred in the 1990s has been the most significant phenomenon of the decade for these countries. By the middle of the decade many developing countries in Asia and Latin America were awash with private foreign capital. In contrast to earlier periods when the scarcity of foreign capital dominated economic policy-making in these countries, the issue now for governments was how to manage the largescale capital inflows to generate higher rates ofinvestrnent and growth. While a number of developing countries were able to benefit substantially from the private foreign financing that globalisation made available to them, it also became apparent that capital inflows were not a complete blessing and could even turn out to be a curse. Indeed, in some countries capital inflows led to rapid monetary expansion, inflationary pressures, real exchange rate appreciation, fmancial sector difficulties, widening current account deficits, and a rapid build-up of foreign debt. In addition, as the experience of Mexico in 1994 and the Asian crisis of 1997-98 demonstrated, financial integration and globalisation can cut both ways. Private capital flows are volatile and eventually there can be a large reversal of capital because of changes in expected asset returns, investor herding behaviour, and contagion effects. Such reversals can lead to recessions and serious problems for financial systems. This paper examines the characteristics, causes and consequences of capital flows to developing countries in the 1990s. It also highlights the appropriate policy responses for governments facing such inflows, specifically to prevent overheating of the economy, and to limit the vulnerability to reversals of capital flows.

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Spillovers to the Global South

10.1093/oso/9780198797173.003.0002 ◽

2017 ◽

Author(s):

Yilmaz Akyüz

Keyword(s):

World Economy ◽

Commodity Prices ◽

Global South ◽

Capital Inflows ◽

Global Crisis ◽

Advanced Economies ◽

The World ◽

Run Up ◽

Global Growth ◽

Very High

The crisis demolished the myth that EDEs were decoupled from advanced economies and BRICS were becoming new engines of global growth. From 2011 onwards, with the end of the twin booms in commodity prices and capital inflows, growth in EDEs has converged downward towards the depressed levels of advanced economies from the very high levels achieved in the run-up to the global crisis and the immediate aftermath. Loss of momentum is particularly visible in economies that failed to manage the earlier booms prudently. In examining the spillovers from policies in major advanced economies and China to EDEs, the chapter introduces the notion of commodity-finance nexus wherein these markets reinforce each other during both expansions and contractions. The chapter concludes with a brief discussion of policies needed to put the world economy into decent shape and to avoid liquidity and debt crises in EDEs.

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Emotional Cities

10.1093/oso/9780198797562.001.0001 ◽

2017 ◽

Cited By ~ 6

Author(s):

Joseph Ben Prestel

Keyword(s):

Nineteenth Century ◽

Capital Flows ◽

Urban History ◽

Middle Eastern ◽

Loss Of Control ◽

Global Capital ◽

Dynamic Transformation ◽

Two Cities ◽

History Of ◽

The City

Between 1860 and 1910, Berlin and Cairo went through a period of dynamic transformation. During this period, a growing number of contemporaries in both places made corresponding arguments about how urban change affected city dwellers’ emotions. In newspaper articles, scientific treatises, and pamphlets, shifting practices, such as nighttime leisure, were depicted as affecting feelings like love and disgust. Looking at the ways in which different urban dwellers, from psychologists to revelers, framed recent changes in terms of emotions, this book reveals the striking parallels between the histories of Berlin and Cairo. In both cities, various authors associated changes in the city with such phenomena as a loss of control over feelings or the need for a reform of emotions. The parallels in these arguments belie the assumed dissimilarity between European and Middle Eastern cities during the nineteenth century. Drawing on similar debates about emotions in Berlin and Cairo, the book provides a new argument about the regional compartmentalization of urban history. It highlights how the circulation of scientific knowledge, the expansion of empires, and global capital flows led to similarities in the pasts of these two cities. By combining urban history and the history of emotions, this book proposes an innovative perspective on the emergence of different, yet comparable cities at the end of the nineteenth century.

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Commodity price pass-through along the pricing chain

Review of World Economics ◽

10.1007/s10290-021-00425-2 ◽

2021 ◽

Author(s):

Rebeca Jiménez-Rodríguez ◽

Amalia Morales-Zumaquero

Keyword(s):

Emerging Economies ◽

Raw Materials ◽

Commodity Prices ◽

Commodity Price ◽

Emerging Countries ◽

Consumer Prices ◽

Advanced Economies ◽

The World ◽

Producer Prices ◽

Pass Through

AbstractThis paper analyses the commodity price pass-through along the pricing chain for the global commodity price index and the indices of its main categories (i.e., agricultural raw materials, food and beverages, energy and metals) in the world, advanced and emerging economies. To do so, the study considers country-by-country vector autoregression models and pool the results by taking weighted means for 18 advanced economies and 19 emerging countries, as well as for the world (defined as the sum of advanced and emerging economies). The results show the following: (i) there is evidence in favour of partial pass-through from commodity prices to producer prices, although the evidence for the pass-through to consumer prices is less evident; (ii) the pass-through in the world seems to be led by both advanced and emerging countries for producer prices and only by advanced economies for consumer prices; (iii) higher prices in the four categories (agricultural raw materials only in the short-run) induce significant higher producer prices in almost all cases, with shocks in the prices of energy and metals showing the largest effects; and (iv) energy prices explain the highest variability of producer and consumer prices.

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A Reappraisal of the Prebisch-Singer Hypothesis Using Wavelets Analysis

Journal of Risk and Financial Management ◽

10.3390/jrfm14070319 ◽

2021 ◽

Vol 14 (7) ◽

pp. 319

Author(s):

Hany Fahmy

Keyword(s):

International Trade ◽

Structural Breaks ◽

Developing Economies ◽

Commodity Prices ◽

Commodity Price ◽

Data Set ◽

Price Series ◽

Long Run ◽

Starting Point ◽

The Impact

The Prebisch-Singer (PS) hypothesis, which postulates the presence of a downward secular trend in the price of primary commodities relative to manufacturers, remains at the core of a continuing debate among international trade economists. The reason is that the results of testing the PS hypothesis depend on the starting point of the technical analysis, i.e., stationarity, nonlinearity, and the existence of structural breaks. The objective of this paper is to appraise the PS hypothesis in the short- and long-run by employing a novel multiresolution wavelets decomposition to a unique data set of commodity prices. The paper also seeks to assess the impact of the terms of trade (also known as Incoterms) on the test results. The analysis reveals that the PS hypothesis is not supported in the long run for the aggregate commodity price index and for most of the individual commodity price series forming it. Furthermore, in addition to the starting point of the analysis, the results show that the PS test depends on the term of trade classification of commodity prices. These findings are of particular significance to international trade regulators and policymakers of developing economies that depend mainly on primary commodities in their exports.

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