Title The dynamic effects of commodity prices on fiscal performance in Latin America / prepared by Leandro Medina

Published [Washington, D.C.] : International Monetary Fund, ©2010

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Description 1 online resource (27 pages) : color illustrations Series IMF working paper ; WP/10/192 IMF working paper ; WP/10/192 Contents Cover Page; Title Page; Copyright Page; Contents; I. Introduction; 1. Country-Specific Commodity Price Indices; 2. Commodity-Related Fiscal Revenues; 3. Contribution of Commodity Price Shocks to the Variance of Primary Expenditure Growth; II. Commodity Prices And Their Dynamic Impact On Fiscal Positions: Methodology; A. Vector Autoregression Approach; B. Data; 1. The Importance of Commodity Exports; 2. Composition of Country-Specific Commodity Price Indices; III. Results; A. The dynamic responses of fiscal variables to commodity price shocks 4. Response of Commodity Prices to One Standard Cholesky Innovation in5. Accumulated Response of Commodity Prices to One Standard Cholesky; 6. Accumulated Response of Primary Expenditures to One Standard Cholesky; 7. Accumulated Response of Total Revenues to One Standard Cholesky; 8. Accumulated Response of GDP to Commodity Price One Standard Cholesky; 3. Commodity Price Shocks as a Source of Fluctuations in Primary Expenditures; 4. Sample Period by Country; 5. Responses to Commodity Price Shocks; B. Looking at fiscal rules; IV. Conclusion; Appendix 1. Data; References; Footnotes Summary The recent boom and bust in commodity prices has raised concerns about the impact of volatile commodity prices on Latin American countries' fiscal positions. Using a novel quarterly data set-which includes unique country-specific commodity price indices and a comprehensive measure of public expenditures-this paper analyzes the dynamic effects of commodity price fluctuations on fiscal revenues and expenditures for eight commodity-exporting Latin American countries. The results indicate that Latin American countries' fiscal positions react strongly to shocks to commodity prices, yet there are marked differences across countries. Fiscal variables in Venezuela display the highest sensitivity to commodity price shocks, with expenditures reacting significantly more than revenues. At the other end of the spectrum, in Chile expenditure reacts very little to commodity price fluctuations, and the dynamic responses of its fiscal indicators are very similar to those seen in high-income commodity-exporting countries. This distinct behavior across countries may relate to institutional arrangements, which in some cases include the efficient application of fiscal rules amid political commitment and high standards of transparency Bibliography Includes bibliographical references (pages 12-13) Notes Print version record Subject Primary commodities -- Prices -- Latin America -- Econometric models Prices -- Latin America -- Econometric models Commodity exchanges -- Latin America -- Econometric models Fiscal policy -- Latin America -- Econometric models Commodity exchanges -- Econometric models Fiscal policy -- Econometric models Prices -- Econometric models Primary commodities -- Prices -- Econometric models Latin America Form Electronic book Author International Monetary Fund. Western Hemisphere Department, issuing body ISBN 9781455206162 1455206164 1282846639 9781282846630 1462313353 9781462313358 9786612846632 6612846631 1455202266 9781455202263

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