Commodity Cycles

The demand for resources by emerging economies and the implications of that demand for countries like Australia are issues that policy makers and investors are facing. This project seeks to understand commodity cycles and their financial market and macroeconomic effects in four parts by modeling: currency, equity and commodity market linkages; carry trade risks for commodity exporting countries; the macroeconomic effects of a carry trade collapse; and global business cycles, focusing on emerging markets in mitigating/amplifying shock transmission. It is expected that commodity countries respond to each element differently to non-commodity exporting countries.