INFLUENCE OF WORLD COMMODITY PRICES ON THE DYNAMICS OF INCOME OF EXPORTING COUNTRIES OF NATURAL RESOURCES UNDER GLOBALIZATION

Abstract

A feature of modern globalization processes is their vulnerability to the volatility of short-term capital flows, which, combined with the growing volatility of commodity prices, have created serious difficulties for the economic policies of commodity-oriented countries. Therefore, the study of the impact of world commodity prices on the dynamics of economic growth of countries with commodity exports and the development of an appropriate methodology based on modern economic and mathematical tools is an urgent task. The purpose of the study is the impact of volatility and the level of world commodity prices on income dynamics (GDP and industrial production) using three groups of countries with different levels of economic development as an example. Functional dependencies were studied for three groups of countries: industrial countries exporting raw materials, countries – commodity exporters of low income and commodity countries of the former Soviet Union. The analysis is based on quarterly data for the period 1980–2018 using the Two-Step Least Squares (2SLS) method. We developed a methodology for the economic and statistical analysis of the functional dependencies of the commodity economy, which provides for the simultaneous accounting of the level of world commodity prices and their volatility, allows us to empirically evaluate the mechanisms of the macroeconomic influence of commodity prices on the dynamics of economic growth, primarily income (GDP and industrial production). It has been established that rising world prices for raw materials improves the dynamics of GDP and industrial production of countries exporting primary resources, while the consequences of high volatility of price indices are predominantly negative. If the impact on the economic growth of the exporting countries of raw materials of individual price indices coincides, then the corresponding estimates for volatility can differ significantly.