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Discussion Paper
Reconsidering the Phase One Trade Deal with China in the Midst of the Pandemic
It may be hard to remember given the pandemic, but trade tensions between the United States and China eased in January 2020 with the inking of the Phase One agreement. Under the deal, China committed to a massive increase in its purchases of U.S. goods and services, with targets set for various types of products. At the time of the pact, the U.S. economy was operating near full capacity, and any increase in U.S. exports stemming from the pact would likely have resulted in only a small boost to growth. The environment is now starkly different, with the U.S. economy operating far below ...
Working Paper
Taxonomy of Global Risk, Uncertainty, and Volatility Measures
A large number of measures for monitoring risk and uncertainty surrounding macroeconomic and financial outcomes have been proposed in the literature, and these measures are frequently used by market participants, policy makers, and researchers in their analyses. However, risk and uncertainty measures differ across multiple dimensions, including the method of calculation, the underlying outcome (that is, the asset price or macroeconomic variable), and the horizon at which they are calculated. Therefore, in this paper, we review the literature on global risk, uncertainty, and volatility ...
Journal Article
Commodity futures investing: method to the madness
Just as there are popular indexes that measure the value of groups of stocks, such as the Dow Jones industrial average, there are indexes that do the same for commodity futures.
Working Paper
Commodity Exports, Financial Frictions and International Spillovers
This paper offers a solution to the international co-movement puzzle found in open-economy macroeconomic models. We develop a small open-economy (SOE) dynamic stochastic general equilibrium (DSGE) model describing three endogenous channels that capture spillovers from the world to a commodity exporter: a world commodity price channel, a domestic commodity supply channel and a financial channel. We estimate our model with Bayesian methods on two commodity-exporting SOEs, namely Canada and South Africa. In addition to explaining international business cycle synchronization, the new model ...
Russia’s Invasion of Ukraine and Its Impact on Stock Prices
Since the two countries are global suppliers of raw materials, Russia’s invasion of Ukraine triggered a commodity price shock. Which stocks were most sensitive to it?
Discussion Paper
The Optimal Extraction of Exhaustible Resources
Policymakers concerned about rapid swings in commodity prices seek economic guidance about causal factors and future trends, but standard models?based on Harold Hotelling?s classic 1931 theory?are unable to explain actual data on price variability for a wide range of commodities. In this paper, we review this ?Hotelling puzzle? and suggest modifications to current theory that may improve explanations of commodity price changes and provide better policy advice.
Working Paper
Industrialization and the demand for mineral commodities
This paper uses a new data set extending back to 1840 to investigate how industrialization affects the derived demand for mineral commodities. I establish that there is substantial heterogeneity in the long-run effect of manufacturing output on demand across five commodities after controlling for sectoral change, substitution and technological development. My results imply substantial differences across commodities with regard to future demand from industrializing countries and with regard to the effect of demand shocks on prices. Models should include non-Gormand preferences to account for ...
How global oil sanctions lowered Russian oil export prices
The decline in Russian oil export revenue since January 2022 was achieved by reducing the Russian export price rather than the volume of Russian oil exports.