Unit 1: Causes of price volatility

This short revision video looks at some of the causes of price volatility that we see in many commodity markets around the world. The examples of price volatility in sugar and in crude oil are used as applied examples and the significance of low price elasticity of demand and low price elasticity of supply is emphasised when drawing the relevant analysis diagrams.

Unit 4: Primary Product Dependency & commodity prices

As world commodity prices plunge, who gains and who loses?

This should be a ‘favourite topic’ for determined macro students. The concept of a resource curse is well worth covering, since there are many analysis points (about how the cause of primary product dependency could lead to a variety of effects). There’s also ample scope for evaluation, examining who will be affected, by how much and to what extent it can impact on economic performance – loads of ‘it depends’ statements, in other words.

The Economist has published a handy map tool to see who are the primary product importers and exporters around the world.

The plunging oil price has sent the currencies of oil exporting economies into a dive. This is the flip side of Dutch Disease, in which demand for resources drives exchange rate movements.

Shifting terms of trade also have a big impact, especially on developing economies.

Lots of key issues for Unit 4 essay and case study questions: Please click on the links to access notes on them. (Dutch disease, terms of trade)