Trade in Commodities and Business Cycle Volatility

This paper studies the role of differences in patterns production and international trade on business cycle volatility emerging developed economies. We study a multisector small open economy which firms produce commodities manufactures. estimate model to match key cross-sectional time-series across countries. Emerging economies run surpluses deficits manufactures, while sectoral flows are balanced find that these amplify response commodity price fluctuations. show evidence consistent with this mechanism using cross-country data. (JEL E23, E32, F14, F41, F44)