TWN Info Service on Finance and Development (Nov17/01)
1 November 2017
Third World Network

South Centre

Announcing a New Research Paper from the South Centre
 
The Commodity-Finance Nexus:
Twin Boom and Double Whammy

South Centre Research Paper No. 80

October 2017

15 pages

English

ISSN 1819-6926

The South Centre recently published Research Paper No. 80: "The Commodity-Finance Nexus: Twin Boom and Double Whammy," authored by  Yilmaz Akyüz,Chief Economist of the South Centre.

International commodity prices and capital inflows to developing countries are increasingly synchronized, subjecting commodity-dependent economies to double boom-bust cycles.  On the one hand, there are a number of common monetary factors, notably international interest rates and the exchange rate of the dollar that influence commodity prices and capital inflows in the same direction.  On the other hand, commodity prices and capital inflows reinforce each other through their influence on economic activity in developing countries.  Capital inflows move pro-cyclically with commodity prices, aggravating both positive and negative external trade shocks.  This synchronization has greatly heightened the vulnerability of commodity-dependent developing economies to global boom-bust cycles.

To access the research paper directly, go to this webpage:https://www.southcentre.int/research-paper-80-october-2017/

To access the South Centre website, where you can also find other research papers, publications and news items, go to this webpage: http://www.southcentre.int .

South Centre
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