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Capital mobility in commodity-exporting economies

Author

Listed:
  • Polbin Andrey

    (LSAGRT, RANEPA, Gaidar Institute, Moscow, Russian Federation)

  • Rybak Konstantin

    (RANEPA, Moscow, Russian Federation)

  • Zubarev Andrey

    (LSAGRT, RANEPA, Gaidar Institute, Moscow, Russian Federation)

Abstract

This paper studies capital mobility in commodity-exporting economies. These countries substantially depend on world commodity prices and have rather high level of savings on average, so it is naturally to assume that they demonstrate special patterns of capital mobility. Our main hypothesis is that constraints on capital mobility in this group of countries depend upon the level of savings compared to the level of investments. In particular, with high savings that follow higher world demand and higher commodity prices, financing country’s desirable level of investment is not a big deal. At the same time, in the case of negative terms of trade shocks these commodity-exporting economies may experience lower savings and higher country risk-premium. This may lead to restrictions on borrowing capital in the global market, resulting in a high correlation between investments and savings. The results of threshold regressions speak in favour of our hypothesis.

Suggested Citation

  • Polbin Andrey & Rybak Konstantin & Zubarev Andrey, 2020. "Capital mobility in commodity-exporting economies," Studies in Nonlinear Dynamics & Econometrics, De Gruyter, vol. 24(5), pages 1-10, December.
    • Handle: RePEc:bpj:sndecm:v:24:y:2020:i:5:p:10:n:2
    DOI: 10.1515/snde-2019-0070
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    1. Golub, A. & Potashnikov, V., 2022. "Theoretical analysis of development traps: On the example of Russia," Journal of the New Economic Association, New Economic Association, vol. 54(2), pages 56-74.

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