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After the Boom–Commodity Prices and Economic Growth in Latin America and the Caribbean
Author:
Bertrand Grussnull

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Series:
IMF Working Papers
Volume/Issue:
Volume 2014: Issue 154
Language:
English
Publication Date:
14 Aug 2014
DOI:
https://doi.org/10.5089/9781498363518.001
ISBN:
9781498363518
ISSN:
1018-5941
Pages:
43
Keywords:
WP; commodity; commodity price; commodity exporter; output; Global VAR (GVAR); commodity prices; output growth; Latin America; food commodity; price scenario; commodity export price index; commodity supply; commodity outlook; commodity-price VARX; commodity price projection; commodity mix; commodity spot prices; commodity exporters of LAC; price outlook; Production growth; Commodity price indexes; Commodity price fluctuations; Global; Caribbean
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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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After skyrocketing over the past decade, commodity prices have remained stable or eased somewhat since mid-2011—and most projections suggest they are not likely to resume the upward trend observed in the last decade. This paper analyzes what this turn in the commodity price cycle may imply for output growth in Latin America and the Caribbean. The analysis suggests that growth in the years ahead for the average commodity exporter in the region could be significantly lower than during the commodity boom, even if commodity prices were to remain stable at their current still-high levels. Slower-than-expected growth in China represents a key downside risk. The results caution against trying to offset the current economic slowdown with demand-side stimulus and underscore the need for ambitious structural reforms to secure strong growth over the medium term.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund
Volume 2014: Issue 154