RBA Annual Conference – 2009 Terms of Trade Shocks and Fiscal Cycles

Table 2: Cycles in Government Revenues and Terms of Trade
table equation
Regressions Explanatory variables Countries
High-income (OECD) Upper-middle-income Lower-middle-income Low-income
Coefficient p-value Coefficient p-value Coefficient p-value Coefficient p-value
Benchmark Constant 0.05 (0.90)   0.003 (0.99)   −0.12 (0.95)   −0.01 (0.99)
Terms of trade −0.01 (0.71)   0.08 (0.00)   0.26 (0.02)   −0.03 (0.25)
GDP 0.004 (0.00)   0.001 (0.24)   0.001 (0.00)   0.003 (0.00)
1 Terms of trade −0.07 (0.24)   0.11 (0.00)   0.42 (0.02)   −0.03 (0.50)
Terms of trade x capital flow bonanzas −0.10 (0.29)   0.01 (0.93)   −0.49 (0.09)   −0.03 (0.72)
GDP 0.004 (0.00)   0.001 (0.23)   0.001 (0.01)   0.003 (0.00)
2 Terms of trade 0.01 (0.82)   0.15 (0.00)   0.69 (0.00)   −0.02 (0.71)
Terms of trade x terms of trade booms −0.06 (0.52)   −0.12 (0.01)   −0.77 (0.02)   −0.02 (0.81)
GDP 0.004 (0.00)   0.001 (0.21)   0.001 (0.00)   0.003 (0.00)
3 Terms of trade −0.02 (0.68)   0.03 (0.22)   0.60 (0.00)   −0.01 (0.64)
Terms of trade x flexible exchange rates −0.23 (0.17)   0.06 (0.06)   −0.63 (0.01)   0.01 (0.68)
GDP 0.004 (0.00)   0.001 (0.11)   0.001 (0.00)   0.006 (0.00)
4 Terms of trade 0.04 (0.36)   −0.01 (0.80)   0.03 (0.90)   −0.04 (0.19)
Terms of trade x persistent terms of trade shocks −0.33 (0.00)   0.14 (0.00)   0.29 (0.29)   0.03 (0.51)
GDP 0.004 (0.00)   0.0004 (0.41)   0.001 (0.00)   0.003 (0.00)
5 Terms of trade −0.02 (0.69)   −0.01 (0.45)   −0.02 (0.90)   −0.04 (0.19)
Terms of trade x commodity-producing countries 0.02 (0.89)   0.18 (0.00)   0.56 (0.02)   0.05 (0.50)
GDP 0.004 (0.00)   0.001 (0.14)   0.001 (0.00)   0.003 (0.00)

Source: author's calculations