Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
7408904 | Journal of Commodity Markets | 2017 | 22 Pages |
Abstract
This paper studies the impact of commodity terms of trade (CToT) volatility on economic growth (and its sources) in a sample of 69 commodity-dependent countries, and assesses the role of Sovereign Wealth Funds (SWFs) and quality of institutions in their long-term growth performance. Using annual data over the period 1981-2014, we employ the Cross-Sectionally augmented Autoregressive Distributive Lag (CS-ARDL) methodology for estimation to account for cross-country heterogeneity, cross-sectional dependence, and feedback effects. We find that while CToT volatility exerts a negative impact on economic growth (operating through lower accumulation of physical capital and lower TFP), the average impact is dampened if a country has a SWF and better institutional quality (hence a more stable government expenditure).
Related Topics
Physical Sciences and Engineering
Energy
Renewable Energy, Sustainability and the Environment
Authors
Kamiar Mohaddes, Mehdi Raissi,