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International Monetary Fund. Western Hemisphere Dept.

References FIGURES 1. Hours Worked and Human Capital in Uruguay 2. Recovery from the 2002 Crisis 3. Impulse Responses to a Commodity Export Price Increase TABLES 1. Growth Accounting 2. Growth Accounting. Cross-Country Comparison, 1978–2019 3. Growth Accounting. Difference Between 2014–19 and 2010–14 4. Growth Accounting During the Pandemic 5. Growth Outlook for the Next Five Years STRUCTURAL DETERMINANTS OF INFLATION A. Introduction B. How Structural Factors Can Affect Inflation C. Data and Stylized Facts D. Empirical Method E. Results F

Issouf Samaké and Mr. Nikola Spatafora
The experience of developing countries over 1990-2010 indicates that commodity prices have a significant impact on fiscal outcomes. Both revenue and expenditure rise in response to commodity (import or export) price increases; the response of the fiscal deficit is ambiguous. A floating exchange rate regime only partially offsets the impact; foreign-exchange reserves do not dampen the effects. Hence, there is a strong case for fiscal hedging against commodity price shocks. Hedging instruments based on a limited set of benchmark world prices for a narrow set of commodities may suffice to realize most of the potential benefits.
Issouf Samaké and Mr. Nikola Spatafora

significance at the 10, 5, and 1 percent level. Total revenue rises in response to increases in commodity export prices, as expected ( Table 6 ). This response is particularly strong in commodity exporters, where a 10 percent increase in commodity export prices leads to an average short-run increase in tax revenue of 0.53 to 0.61 percentage points of GDP. 10 Expenditure rises in response to commodity export price increases, particularly in LIC commodity exporters ( Table 7 ). A 10 percent increase in commodity export prices leads to an average increase in public

International Monetary Fund. Western Hemisphere Dept.

percent higher) and employment (0.7 percent higher). Similarly, the drop in commodity prices after 2014 accounts for about 0.2 lower growth annually during 2015–19. They also account for the negative employment growth and decreasing employment rates observed in the period. Figure 3. Uruguay: Impulse Responses to a Commodity Export Price Increase Sources: Penn World Tables, IMF WEO, Gruss and Kebhaj (2021) and own estimations. P-values for an F-test on the coefficients being significant at any time horizon are reported. D. The Effects of the Pandemic

International Monetary Fund. Research Dept.

than 2 million people or (2) at least one episode of hyperinflation, defined as annual inflation of more than 100 percent. The selection of the core sample of 19 economies is driven by data availability. The key data constraint for inclusion in the core sample of countries is the availability of longer-term (three-year-ahead and longer) forecasts for inflation. 2 Several countries in the “other two country groups” exhibit limited exchange rate flexibility and are heavily dependent on commodities. Under a fixed exchange rate, when commodity export prices increase