Commodity price uncertainty and shocks: implications for economic growth

It has long been believed that commodity price variability causes problems for primaryproducing developing countries, but there is less agreement about which particular manifestations of commodity price movements matter to developing countries. This paper tests the effects of ex post shocks and ex ante price uncertainty on economic growth using the Burnside and Dollar (1997) data set. The shock and uncertainty variables are constructed using a new data set of unique aggregate commodity price indices for 113 developing countries over the period 1957Q1-1997Q4. The analysis shows that per capita growth rates are significantly reduced by large discrete negative commodity price shocks. The magnitude of the effect of negative shocks on growth is very substantial, and appears to work independently of investment, which suggests that adjustment is achieved through severe reductions in capacity utilization. Negative shocks remain highly significant after controlling for government economic policy and institutional quality, which indicates that the result is not attributable exclusively to inappropriate policy responses on the part of governments. The paper also shows that positive shocks have no lasting impact on growth, which is consistent with the findings of both Deaton and Miller (1995) and Collier and Gunning (1999a), but overturns an earlier result which suggested that the long run effects of positive temporary shocks are negative. The third key result is that ex ante uncertainty does not affect growth, which holds for nine different definitions of uncertainty. Hence, what reduces growth is not the prospect of volatile world prices, but the actual realizations of negative shocks. The results are robust to changes in sample composition, changing the time series dimensions of the data, instrumenting for endogenous regressors, and across different estimation methods.

Private investment in developing countries: The effects of commodity shocks and uncertainty

The link between ex post discrete shocks and private investment have never been formally tested in a panel data context, while the evidence of a link between ex ante commodity price uncertainty and investment is weak. This paper constructs measures of discrete shocks and uncertainty using a new multi-country data set of aggregate commodity price indices, and tests the relationship between various manifestations of commodity price variability and private investment rates within the context of a canonical empirical investment model estimated on a sample of 44 developing countries. The analysis confirms theoretical predictions that positive ex post commodity price shocks have strong positive effects on private investment rates in low income developing countries, conditional upon the level of commodity prices. It is also shown that the prospect of uncertain future commodity prices andex post negative shocks do not affect private investment rates.

The effects on growth of commodity price uncertainty and shocks

The author estimates the effects on growth of commodity price shocks, and uncertainty within an established empirical growth model. Ex-post shocks, and ex-ante uncertainty have been treated in the empirical literature as if they were synonymous. But they are distinct concepts, and it is both theoretically, and empirically inappropriate to treat them as synonymous. He shows that the interaction between policy, and aid is robust to the inclusion of variables capturing commodity price movements. More important, his approach departs in three ways from earlier empirical studies of the subject: 1) It deals with issues of endogeneity, without incurring an excessive loss of efficiency. 2) It defines the dependent variable to allow an assessment of the longer-term implications of temporary trade shocks. 3) It imposes no priors on how commodity price movements affect growth, but compares and contrasts a range of competing shock, and uncertainty specifications. The author resolves the disagreement about the long-run effect of positive shocks on growth, finding that positive shocks have no long-run impact on growth (that windfalls from trade shocks do not translate into sustainable increases in income). He shows that negative shocks have large, highly significant, and negative effects on growth, but that commodity price uncertainty does not affect growth.Economic Theory&Research,Payment Systems&Infrastructure,Markets and Market Access,Public Health Promotion,Environmental Economics&Policies,Environmental Economics&Policies,Achieving Shared Growth,Economic Theory&Research,Inequality,Markets and Market Access

Aid, shocks, and growth

Analysis of the relationship between aid and growth by Burnside and Dollar found that the better a country's policies, the more effective aid is in raising growth in that country. But this result has been criticized for being sensitive to choice of sample and for neglecting shocks. The authors incorporate export price shocks into the analysis of aid's effect on growth. They construct export price indices using the approach pioneered by Deaton and Miller. They locate shocks by differencing the indices, removing predictable elements from the stationary process, and normalizing the residuals. Extreme negative shocks are the bottom 2.5 percent tail of this distribution. Introducing these extremeshocks into the Burnside-Dollar regression, the authors find that they are highly significant: unsurprisingly, extreme negative shocks reduce growth. Once these shocks are included, the Burnside-Dollar results become robust to choice of sample. Moreover, the adverse effects of negative shocks on growth can be mitigated through offsetting increases in aid. Indeed, targeting aid to countries experiencing negative shocks appears to be even more important for aid effectiveness than targeting aid to countries with good policies. But the authors show that, overall, donors have not used aid for this purpose.Development Economics&Aid Effectiveness,Gender and Development,Markets and Market Access,Environmental Economics&Policies,School Health,Environmental Economics&Policies,Development Economics&Aid Effectiveness,Inequality,School Health,Markets and Market Access

Commodity price uncertainty in developing countries

Commodity export price uncertainty is typically measured as the standard deviation of the terms of trade, but this approach encounters at least three objections. First, terms of trade indices are unsuitable as proxies for commodity price movements per se. Secondly, the shortness of terms of trade time series makes them inappropriate as a basis for constructing time varying uncertainty measures. Thirdly, simple standard deviation measures ignore the distinction between predictable and unpredictable elements in the price process, and therefore risk overstating uncertainty. The paper examines the features of commodity price uncertainty in developing countries using a new data set of unique quarterly aggregate commodity price indices for 113 developing countries over the period 1957Q1-1997Q4. A total of six different uncertainty measures are constructed, which confirm the importance of distinguishing between predictable and unpredictable components in the price process when measuring uncertainty. A a positive and highly significant relationship between commodity export concentration and commodity price uncertainty is found for all the measures. No obvious link is found between a country’s regional affiliation and its exposure to uncertainty. Similarly, there is no apparent relationship between a country’s experience of uncertainty and the type of commodities which dominates its exports. The exception is oil producers, which face greater uncertainty. The greater uncertainty faced by these countries can, however, be attributed almost exclusively to discrete and well publicised discrete oil shocks. A GARCH based measure of uncertainty indicates considerable time variation in uncertainty. Uncertainty is sometimes characterised by discrete spikes, while uncertainty in countries exhibits a secular increase in uncertainty over time. The majority of countries have seen uncertainty which exhibits considerable persistence. It is not clear what lies behind the time variation in uncertainty, which cannot be explained with reference to relatively time invarying export concentration

Commodity price uncertainty in developing countries

Uncertainty about commodity export prices is important to developing countries -- both governments and producers -- that export primary commodities. Commodity export price uncertainty is typically measured as the standard deviation in the terms of trade. There are three problems with this approach: 1) Terms of trade indices are unsuitable as proxies for commodity price movements per se. 2) The shortness of terms of trade time series makes them inappropriate as a base for constructing time-varying uncertainty measures. 3) Simple standard deviation measures ignore the distinction between predictable and unpredictable elements in the price process, so they risk overstating uncertainty. 4) The author examines commodity price uncertainty in developing countries using new data for quarterly aggregate commodity price indices for 113 developing countries for the period 1957-97. Each index is a geometrically weighted index of 57 commodity prices. He constructs six different measures of uncertainty. The uncertainty measures confirm the importance of distinguishing between predictable and unpredictable components in the price process. But there is a positive, highly significant relationship between commodity export concentration and commodity price uncertainty for all six measures. No obvious link is found between a country's regional affiliation and its exposure to uncertainty. Sub-Saharan African countries, for example, are no more prone to commodity price uncertainty than countries in other commodity-producing regions, although to the extent that they depend more on commodities, they will be affected more than countries with more diversified export baskets. Similarly, there is no apparent relationship between a country's experiences of uncertainty and the type of commodities that dominate its exports-except that oil producers face greater uncertainty (because of discrete, well-publicized oil shocks). A measure of uncertainty based on generalized autoregressive conditional heteroskedasticity (GARCH) indicates considerable time variation in uncertainty. Uncertainty is sometimes characterized by discrete spikes, although uncertainty in countries exhibits a secular increase over time. Most countries experience uncertainty, which tends to persist. It is unclear what lies behind the time variation in uncertainty.Commodities,Markets and Market Access,Common Carriers Industry,Biodiversity,Environmental Economics&Policies,Biodiversity,Access to Markets,Markets and Market Access,Environmental Economics&Policies,Commodities

Möglichkeiten zur Verwendung von Betonbrechsanden

Betonbrechsande stellen in der derzeitigen Abfallerfassung und -aufbereitung einen wenig beachteten Stoffstrom dar. Dabei besitzen sie erhebliches Potential, um nicht nur feine natürliche Gesteinskörnungen, sondern auch einen Teil des Bindemittels bei der Betonherstellung zu ersetzen. Dieser Beitrag stellt zunächst baupraktisch relevante Betonbrechsandeigenschaften vor, um anschließend die derzeit aktuellen technischen Herausforderungen und normative Randbedingungen für die Wiederverwendung von Betonbrechsanden als feine rezyklierte Gesteinskörung zu beschreiben. Fortgeschrittene Aufbereitungsverfahren lassen jedoch perspektivisch eine bessere Kreislaufführung von Betonbrechsanden erwarten, wenn diese gezielt fraktioniert und einzeln behandelt werden, um sowohl feine Gesteinskörnungen als auch (reaktive) Bindemittel zu erhalten

Analysis and evaluation of direct shear tests on concrete joints in hydraulic structures

Neither the shear transfer behavior of unreinforced hydraulic concrete structures nor experimental procedures for its determination have been standardized in recent building codes and regulations. This poses uncertainty for the assessment of the integrity of hydraulic structures. This paper adapts direct shear tests, which are an established method in rock mechanics, for the assessment of unreinforced concrete joints and expands the evaluation method through recognizing surface inclination as a contribution to the coefficient of friction. The evaluation is subsequently performed on direct shear test results performed on specimens taken from a lock built in the early 20th century. Based on the initial state of the concrete joints—intact or cracked bond—results for the basic friction angle and the inclination angle are discussed. Using entire shear stress-deformation-curves as opposed to singular values was found to yield more stable results of shear transfer parameters and additional insight on the validity of the test

Experimental methods for the analysis of the durability behavior of concrete joints

This article addresses the applicability of experimental methods for the evaluation of concrete durability on localized structural weaknesses posed by joints. Three different types of exposure are analyzed: chloride penetration, carbonation, and freeze–thaw attack. First, established experimental methods for the characterization of the durability of plain concrete are presented and their general applicability on concrete joints is discussed. The experimental program focuses on the execution of selected tests on laboratory specimens with and without joints. Indicator tests for both chloride penetration and carbonation are generally feasible, but require attention to specimen preparation. Rapid chloride migration yielded inconclusive results, while uniaxial chloride diffusion coefficient of concrete joints cannot be determined because of the areal extent of profile grinding. For the same reason, the characterization of the resistance to freeze–thaw cycles through surface deterioration is not applicable for concrete joints. The structural damage was instead successfully qualified through direct tension tests

Experimental methods for the analysis of the tensile behavior of concrete joints

Adhesion plays an important role in the evaluation of hydraulic structures with unreinforced concrete joints. The experimental determination of joint tensile strength as a quantifiable parameter is not standardized, resulting in a variety of test setups found in literature. The present paper highlights advantages and disadvantages of three of the most common tension tests for plain concrete and concrete joints through both theoretical and laboratory experimental analysis on specimens with artificial joints. Splitting tension tests were found to be inexpensive but tend to overestimate the adhesive strength of weak joints. Direct tension tests require an elaborate test setup but may yield information on the tension softening behavior. Pull-off tests stand out for their ability to yield in-situ results but deliver inconclusive results