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Impact of commodity price volatility on external debt: the role of exchange rate regimes

Citation

Majumder, MK and Raghavan, MV and Vespignani, JL, Impact of commodity price volatility on external debt: the role of exchange rate regimes, Applied Economics pp. 1-15. ISSN 0003-6846 (2021) [Refereed Article]


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DOI: doi:10.1080/00036846.2021.1947960

Abstract

This study explores the impact of commodity price volatility on external debt accumulation under fixed, managed, and floating exchange rate regimes. We estimate dynamic panel data models for 97 countries from 1993 to 2016. Our empirical findings show that commodity price volatility increases external debt accumulation for commodity-exporting countries. This impact is three-times higher for countries with fixed exchange rate regimes compared to managed floating exchange rate regimes. Under floating exchange regimes, the effect of commodity price volatility on external debt is statistically insignificant. Our results suggest that the adoption of a floating exchange rate regime by commodity-exporting countries is critical to mitigate the effects of commodity price volatility on external debt accumulation.

Item Details

Item Type:Refereed Article
Keywords:commodity price volatility, external debt, exchange rate regimes, commodity-exporting countries
Research Division:Economics
Research Group:Applied economics
Research Field:Macroeconomics (incl. monetary and fiscal theory)
Objective Division:Economic Framework
Objective Group:Macroeconomics
Objective Field:Macroeconomics not elsewhere classified
UTAS Author:Majumder, MK (Mr Monoj Majumder)
UTAS Author:Raghavan, MV (Dr Mala Raghavan)
UTAS Author:Vespignani, JL (Associate Professor Joaquin Vespignani)
ID Code:145507
Year Published:2021
Deposited By:Economics and Finance
Deposited On:2021-07-25
Last Modified:2021-07-26
Downloads:0

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