CHAPTER 7 Primary Commodity Price Series: Lessons for Policymakers in Resource-Rich Countries


This chapter investigates the challenges faced by policymakers when conducting a fiscal policy in resource-rich countries. These challenges become more acute in resource-rich countries in Africa, because in many of them revenues from exporting primary commodities still account for the bulk of export earnings. We shall mainly consider three challenges: (i) the possible secular decline of real commodity prices, the so-called Prebish—Singer hypothesis, (ii) the long cycles that characterize real commodity prices, (iii) the exceeding volatility of real commodity prices and the fact that this volatility is time varying.

Policies to Harness the Power of Natural Resources