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

Table 4: Cycles in Inflation 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 0.01 (0.91)   −1.03 (0.89)   −3.03 (0.75)   −0.8 (0.94)
Terms of trade −0.04 (0.00)   0.02 (0.97)   0.13 (0.83)   −2×10−4 (0.99)
GDP 1×10−4 (0.10)   0.002 (0.90)   5×10−5 (0.96)   −7×10−4 (0.43)
1 Terms of trade −0.04 (0.01)   −0.80 (0.42)   0.16 (0.89)   −0.03 (0.96)
Terms of trade x capital flow bonanzas −0.05 (0.01)   1.43 (0.33)   0.002 (0.99)   0.02 (0.86)
GDP 1×10−4 (0.19)   0.003 (0.85)   5×10−5 (0.97)   −0.001 (0.47)
2 Terms of trade −0.06 (0.00)   1.04 (0.36)   0.55 (0.63)   −0.12 (0.13)
Terms of trade x terms of trade booms 0.04 (0.05)   −1.64 (0.30)   −0.74 (0.66)   0.20 (0.08)
GDP 1×10−4 (0.11)   0.003 (0.87)   5×10−5 (0.96)   −1×10−4 (0.43)
3 Terms of trade −0.03 (0.00)   −0.08 (0.93)   −0.16 (0.87)   0.27 (0.00)
Terms of trade x flexible exchange rates −0.07 (0.13)   0.39 (0.76)   0.73 (0.59)   −0.23 (0.00)
GDP 1×10−4 (0.02)   2×10−4 (0.99)   1×10−4 (0.93)   −1×10−4 (0.27)
4 Terms of trade −0.04 (0.00)   −0.67 (0.45)   −0.01 (0.99)   −0.01 (0.86)
Terms of trade x persistent terms of trade shocks −0.01 (0.89)   1.09 (0.33)   0.19 (0.88)   0.03 (0.75)
GDP 1×10−4 (0.10)   8×10−4 (0.95)   5×10−5 (0.96)   −0.001 (0.43)
5 Terms of trade −0.04 (0.00)   −0.30 (0.72)   −0.14 (0.87)   −0.01 (0.81)
Terms of trade x commodity-producing countries −0.03 (0.89)   0.52 (0.62)   0.51 (0.67)   0.03 (0.80)
GDP 1×10−4 (0.10)   0.002 (0.89)   9×10−5 (0.94)   −1×10−4 (0.41)

Source: author's calculations