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The Short-Run Impact of fluctuating primary commodity prices on three developing economies: Colombia, Ivory Coast and Kenya

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  • Dick, Hermann
  • Gupta, Sanjeev
  • Mayer, Thomas
  • Vincent, David P.

Abstract

Computable general equilibrium models are used to study the short-run impact of fluctuating primary commodity prices on the economies of Colombia, Ivory Coast and Kenya. The results indicate that these economies are destabilized by primary commodity price fluctuations unless governments act to hold real domestic absorption constant. To achieve this, however, would require foreign exchange reserves in excess of the level normally available to these governments for the purpose of stabilising, domestic economic activity.

Suggested Citation

  • Dick, Hermann & Gupta, Sanjeev & Mayer, Thomas & Vincent, David P., 1982. "The Short-Run Impact of fluctuating primary commodity prices on three developing economies: Colombia, Ivory Coast and Kenya," Kiel Working Papers 155, Kiel Institute for the World Economy (IfW Kiel).
    • Handle: RePEc:zbw:ifwkwp:155
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    References listed on IDEAS

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    1. Vincent, David P & Dixon, Peter B & Powell, Alan A, 1980. "The Estimation of Supply Response in Australian Agrucilture: The CRESH/CRETH Production System," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 21(1), pages 221-242, February.
    2. Lim, David, 1974. "Export Instability and Economic Development: The Example of West Malaysia," Oxford Economic Papers, Oxford University Press, vol. 26(1), pages 78-92, March.
    3. Rangarajan, C & Sundararajan, V, 1976. "Impact of Export Fluctuations on Income-A Cross Country Analysis," The Review of Economics and Statistics, MIT Press, vol. 58(3), pages 368-372, August.
    4. Vincent, David P., 1981. "Multisectoral economic models for developing countries," Kiel Working Papers 117, Kiel Institute for the World Economy (IfW Kiel).
    5. Massell, Benton F & Pearson, Scott R & Fitch, James B, 1972. "Foreign Exchange and Economic Development: An Empirical Study of Selected Latin American Countries," The Review of Economics and Statistics, MIT Press, vol. 54(2), pages 208-212, May.
    6. Adams, F Gerard & Behrman, Jere R & Roldan, Romualdo A, 1979. "Measuring the Impact of Primary Commodity Fluctuations on Economic Development: Coffee and Brazil," American Economic Review, American Economic Association, vol. 69(2), pages 164-168, May.
    7. Hanoch, Giora, 1971. "CRESH Production Functions," Econometrica, Econometric Society, vol. 39(5), pages 695-712, September.
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    Cited by:

    1. Vincent, David P., 1983. "A multicountry, multisector general equilibrium model system with endogenous trade," Kiel Working Papers 174, Kiel Institute for the World Economy (IfW Kiel).
    2. Dick, Hermann & Gerken, Egbert & Mayer, Thomas & Vincent, David P., 1982. "Stabilisation strategies in primary commodity exporting countries: A case study of Chile," Kiel Working Papers 144, Kiel Institute for the World Economy (IfW Kiel).

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