(4/16/2015) The possibility of devaluation is apparently an issue in the upcoming Argentine elections. (The forward rate for next year is about 13 pesos per dollar, which is close to the informal rate and suggests a big devaluation relative to the current official exchange rate of 8.) In this connection, an Argentine newspaper has asked me about “Contractionary Currency Crashes,” a paper that I presented as the 5th Mundell-Fleming Lecture of the IMF’s Annual Research Conference.
(1/1/2015) This is the third and final installment of an interview on the outlook for the New Year.
Part 3. Forecasts for International Currency and Commodity Markets
Oil prices plummeted 43% during the course of 2014 – good news for oil-importing countries, but bad news for Russia, Nigeria, Venezuela, and other oil exporters. Some attribute the price drop to the US shale-energy boom. Others cite OPEC’s failure to agree on supply restrictions.
But that is not the whole story. The price of iron ore is down, too. So are gold, silver, and platinum prices. And the same is true of sugar, cotton, and soybean prices. In fact, most dollar commodity prices have fallen since the beginning of the year. Though a host of sector-specific factors affect the price of each commodity, the fact that the downswing is so broadly shared – as is often the case with big price swings – suggests that macroeconomic factors are at work.