Mining and Energy Commodity Price Effects on Colombian Economy

The Colombian economy has a strong dependence on the export of commodities. Different studies show that the prices of these products are exogenous, which have originated direct effects on the national economic activity. Therefore, this paper studies the shock effects produced by mining and energy commodity price variations like oil, coal and nickel on Colombian economy. We used 129 variables for 2001-2016 period and estimated a FAVAR model (Factor Augmented VAR) to observe commodity price effects on different economic aggregates, the results show that price fluctuations have significant effects on variables such as economic activity, investment, the trade balance, the real exchange rate and external debt.

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The Effect of Real Exchange Rate on Trade Balance in a Resource-Rich Economy: The Case of Mongolia

Foreign Trade Review ◽

10.1177/0015732518797184 ◽

2018 ◽

Vol 53 (4) ◽

pp. 211-224 ◽

Cited By ~ 2

Author(s):

Gan-Ochir Doojav

Keyword(s):

Exchange Rate ◽

Real Exchange Rate ◽

Trade Balance ◽

Developing Economies ◽

Jel Classification ◽

Vector Error Correction ◽

Vector Error ◽

Long Run ◽

Short Run ◽

Exchange Rate Depreciation

For resource-rich developing economies, the effect of real exchange rate depreciation on trade balance may differ from the standard findings depending on country specific characteristics. This article employs vector error correction model to examine the effect of real exchange rate on trade balance in Mongolia, a resource-rich developing country. Empirical results show that exchange rate depreciation improves trade balance in both short and long run. In particular, the well-known Marshall–Lerner condition holds in the long run; however, there is no evidence of the classic J-curve effects in the short run. The results suggest that the exchange rate flexibility may help to deal effectively with current account deficits and exchange rate risk. JEL Classification: C32, C51, F14, F32

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Sovereign Defaults, External Debt and Real Exchange Rate Dynamics

SSRN Electronic Journal ◽

10.2139/ssrn.2416437 ◽

2014 ◽

Cited By ~ 1

Author(s):

Tamon Asonuma

Keyword(s):

Exchange Rate ◽

Real Exchange Rate ◽

External Debt ◽

Exchange Rate Dynamics ◽

Sovereign Defaults ◽

Real Exchange Rate Dynamics

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Research On Monetary Neutrality: Evidence From Exchange Rate And Trade Balance Of G-7 Countries

Journal of Applied Business Research (JABR) ◽

10.19030/jabr.v24i2.1351 ◽

2011 ◽

Vol 24 (2) ◽

Cited By ~ 1

Author(s):

Doh-Khul Kim

Keyword(s):

Exchange Rate ◽

Real Exchange Rate ◽

Trade Balance ◽

Monetary Shocks ◽

Font Size ◽

Long Run ◽

Short Period ◽

Short Run ◽

Monetary Neutrality ◽

Nominal Shocks

According to a recent paper by Fisher and Huh (2002), in contrast to a long-run neutrality hypothesis, nominal shocks have long-run effects on a country’s real exchange rate and trade balance. However employing a similar method (VAR) with identical restrictions (long-run neutrality and short-run recursive hypotheses), this paper shows that the effects on the real exchange rate are much shorter in this G-7 country study than what Fisher and Huh (2002) contend. Further, the trade balance improves for a short period of time, from which it can conclude there is a shorter existence of the depreciation effect in response to expansionary monetary shocks, which supports the long-run neutrality hypothesis in an open macroeconomic framework.

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Real exchange rate and trade balance in Turkey: Evidence from heterogeneous panel data

Panoeconomicus ◽

10.2298/pan161208007k ◽

2020 ◽

pp. 7-7

Author(s):

Ahmet Kaya

Keyword(s):

Exchange Rate ◽

Panel Data ◽

Real Exchange Rate ◽

Trade Balance ◽

Bilateral Trade ◽

Income Elasticity ◽

Balance Model ◽

Common Correlated Effects ◽

The Usa ◽

Heterogeneous Panel

In this study, the effect of real exchange rate on bilateral trade balance between Turkey and its 25 main trade partners is investigated for the period of 1996 - 2015 with heterogeneous panel data techniques. Trade balance model is estimated by using Mean Group (MG) estimator, which allows parameter heterogeneity, Common Correlated Effects Mean Group (CCEMG), and Augmented Mean Group (AMG) estimators, which both allow cross-section dependency and heterogeneity. Results indicate that the real exchange rate elasticity of the trade balance ranges between -0.40 and -0.45 and Marshall-Lerner (ML) condition is valid for Turkey. According to the results, the foreign income elasticity of trade balance ranges between 1.54 and 2.84, while for domestic income elasticity, it is found between -0.75 and -1.38. Country-specific results show that ML condition is valid for the USA, Belgium, Spain, Switzerland, Romania, and Russia at the bilateral level according to both CCEMG and AMG estimators.

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The Relationship Between Economic Activity, Tourism Expenditures and Real Exchange Rate in 9 Most Visited OECD Countries

Journal of Yaşar University ◽

10.19168/jyasar.952435 ◽

2021 ◽

Vol 16 (63) ◽

pp. 1537-1552

Author(s):

Sevilay KÜÇÜKSAKARYA ◽

Mustafa ÖZER

Keyword(s):

Exchange Rate ◽

Real Exchange Rate ◽

Economic Activity ◽

Oecd Countries ◽

The Relationship

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The Determinants of Pakistan’s Trade Balance: An ARDL Cointegration Approach

THE LAHORE JOURNAL OF ECONOMICS ◽

10.35536/lje.2010.v15.i1.a1 ◽

2010 ◽

Vol 15 (1) ◽

pp. 1-26 ◽

Cited By ~ 13

Author(s):

Waliullah Waliullah ◽

Mehmood Khan Kakar ◽

Rehmatullah Kakar ◽

Wakeel Khan

Keyword(s):

Exchange Rate ◽

Real Exchange Rate ◽

Money Supply ◽

Trade Balance ◽

Exchange Rate Regime ◽

Annual Data ◽

Impulse Response Functions ◽

Bounds Testing ◽

Distributed Lag ◽

Long Run

This article is an attempt to examine the short and long-run relationship between the trade balance, income, money supply, and real exchange rate in the case of Pakistan’s economy. Income and money variables are included in the model in order to examine the monetary and absorption approaches to the balance of payments, while the real exchange rate is used to evaluate the conventional approach of elasticities (Marshall Lerner condition). The bounds testing approach to cointegration and error correction models, developed within an autoregressive distributed lag (ARDL) framework is applied to annual data for the period 1970 to 2005 in order to investigate whether a long-run equilibrium relationship exists between the trade balance and its determinants. Additionally, variance decompositions (VDCs) and impulse response functions (IRFs) are used to draw further inferences. The result of the bounds test indicates that there is a stable long-run relationship between the trade balance and income, money supply, and exchange rate variables. The estimated results show that exchange rate depreciation is positively related to the trade balance in the long and short run, consistent with the Marshall Lerner condition. The results provide strong evidence that money supply and income play a strong role in determining the behavior of the trade balance. The exchange rate regime can help improve the trade balance but will have a weaker influence than growth and monetary policy.

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