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Coping with terms-of-trade shocks in developing countries

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  • Christian Broda
  • Cédric Tille

Abstract

Sharp swings in a developing country's terms of trade, the price of its exports relative to the price of its imports, can seriously disrupt output growth. An analysis of the effects of a decline in export prices in seventy-five developing economies suggests that countries with a flexible exchange rate will experience a much milder contraction in output than their counterparts with fixed exchange rate regimes.

Suggested Citation

  • Christian Broda & Cédric Tille, 2003. "Coping with terms-of-trade shocks in developing countries," Current Issues in Economics and Finance, Federal Reserve Bank of New York, vol. 9(Nov).
    • Handle: RePEc:fip:fednci:y:2003:i:nov:n:v.9no.11
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    References listed on IDEAS

    as
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