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Luciana Juvenal

and Export Shares Figure 3: Terms of Trade Measures: A Comparison Figure 4: Forecast Error Variance Decomposition: ToT and ToT o Shocks Figure 5: Example of Narrative Restrictions Figure 6: Impulse Responses to an Export and Import Price Shock: All Countries Figure 7: Comparison Forecast Error Variance Decomposition (P x , P m and Y g vs. World Shocks) Figure 8: Heterogeneous Effects of P x and P m shocks on Output Tables Table 1: Commodity Imports and Exports (1980–2016) Table 2: Descriptive Statistics Table 3: Commodity Terms of Trade

Luciana Juvenal
When analyzing terms-of-trade shocks, it is implicitly assumed that the economy responds symmetrically to changes in export and import prices. Using a sample of developing countries our paper shows that this is not the case. We construct export and import price indices using commodity and manufacturing price data matched with trade shares and separately identify export price, import price, and global economic activity shocks using sign and narrative restrictions. Taken together, export and import price shocks account for around 40 percent of output fluctuations but export price shocks are, on average, twice as important as import price shocks for domestic business cycles.
Luciana Juvenal

mix of heterogeneous products or incorrect recording of quantities. One conjecture in Schmitt-Grohé and Uribe (2018) is that the “disconnect” could be partly driven by the fact that terms-of-trade shocks may fail to capture the transmission mechanism of world shocks. In fact, Fernández, Schmitt-Grohé and Uribe (2017) argue that world shocks propagate to the domestic business cycle through commodity prices and show that fluctuations in the latter explain a sizable proportion of domestic business cycles. To illustrate this result, the scatter plot presented in

Mr. Don E. Schlagenhauf and Stefan C. Norrbin
Empirical research has been conducted on the various theories of the business cycle over many countries. However, very little research has attempted to undertake a multi-country disaggregate investigation into the sources of output change. This paper decomposes fluctuations in industry output in a particular country into: (1) a nation specific shock; (2) an industry specific shock; (3) a world shock; and (4) an idiosyncratic factor. Using a dynamic factor analysis-state-space approach, the paper finds that the nation-specific shock is the most important impulse.
Mr. Don E. Schlagenhauf and Stefan C. Norrbin

the sources of output change. This type of study allows the relative importance of nation-specific, industry-specific, and world shocks to be determined. Nation-specific shocks are defined as changes in output growth that are unique to a particular nation, but shared by all industries in that nation. A nation-specific shock would occur if countries pursue individual monetary and/or fiscal policies. Of course, nation-specific shocks could be real such as a nation-wide union action or a nation-wide regulatory policy change. Industry-specific shocks occur as a result