01805cas a2200265 a 4500 AALejournalIMF006114 230101c9999 xx r poo 0 0eng d 5.00 USD 9781451873764 1018-5941 BD-DhAAL BD-DhAAL Borensztein, Eduardo. Macro-Hedging for Commodity Exporters / Eduardo Borensztein, Damiano Sandri, Olivier Jeanne. Washington, D.C. : International Monetary Fund, 2009. 1 online resource (29 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students This paper uses a dynamic optimization model to estimate the welfare gains of hedging against commodity price risk for commodity-exporting countries. The introduction of hedging instruments such as futures and options enhances domestic welfare through two channels. First, by reducing export income volatility and allowing for a smoother consumption path. Second, by reducing the country's need to hold foreign assets as precautionary savings (or by improving the country's ability to borrow against future export income). Under plausibly calibrated parameters, the second channel may lead to much larger welfare gains, amounting to several percentage points of annual consumption. Mode of access: Internet Jeanne, Olivier. Sandri, Damiano. IMF Working Papers; Working Paper ; No. 2009/229 Full text available on IMF http://elibrary.imf.org/view/journals/001/2009/229/001.2009.issue-229-en.xml IMF e-Library