Commodity price stabilisation: macroeconomic impacts and policy options

Commodity price stabilisation: macroeconomic impacts and policy options

A macroeconometric simulation study is undertaken to evaluate the impact of commodity price stabilisation (CPS) schemes for the export tree crop industry in Papua New Guinea. The findings suggest that there is a negligible level of favourable macroeconomic impacts of CPS. Contrary to the expectation, CPS adversely affects the stability of monetary and external sectors (BOP). CPS policy has fail...

Excessive commodity price volatility: Macroeconomic effects on growth and policy options

Active Labour Market Policy and Macroeconomic Stabilisation

This paper considers the feasibility of a flexible system of active labour market policy which would adjust to the changing phases of the business cycle, and would dispense with the necessity to reinvent systems from scratch in every phase of every cycle. The proposed system would have an expenditure allocation which varied with the levels of short-term and long-term unemployment, and would all...

The Theory of Commodity Price Stabilisation Rules: Welfare Impacts and Supply Responses*

Commodity price stabilisation schemes are again topical, this time as a result of pressure from UNCTAD for an integrated programme on commodities as part of the 'New International Order'. Despite the long history of interest in the subject and its evident importance for developing countries the conventional analysis of the impact of price stabilisation is remarkably simplistic.^ The theory was ...

Commodity price shocks and imperfectly credible macroeconomic policies

In this paper, we analyze how lack of credibility and transparency of monetary and fiscal policies undermines the effectiveness of macroeconomic policies to isolate the economy from commodity price fluctuations. We develop a general equilibrium model for a commodity exporting economy where macro policies are conducted through rules. We show that the responses of output, aggregate demand, and in...