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Terms of Trade Shocks and Economic Recovery
Author:
Patrick A. Imam
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Eleonara Granziera null

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Mr. Norbert Funke
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Series:
IMF Working Papers
Volume/Issue:
Volume 2008: Issue 036
Language:
English
Publication Date:
01 Feb 2008
DOI:
https://doi.org/10.5089/9781451868982.001
ISBN:
9781451868982
ISSN:
1018-5941
Pages:
23
Keywords:
WP; terms of trade shock; exchange rate
Legal-disclaimer:
IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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This paper identifies factors that contribute to a fast recovery in growth after persistent negative terms of trade shocks, using a sample of 159 countries for 1970-2006. The results suggest that policies matter. Fast recoveries are fairly robustly related to real exchange rate depreciation and improvements in government stability and the institutional environment. A timely increase in aid may also support recovery.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund