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The objective of this project-thesis is to revise the hedging techniques of an industrial company, Circuit Foil Luxembourg, that are used by this company to hedge the Foreign Exchange Risk and the Commodity Price Risk. Throughout its daily life, the company must face these two risks. In order to avoid the possibility of making losses due to these risks, it is necessary for the company to use different hedging techniques.

To perform the revision of these hedging techniques, it is necessary to go through different steps. Firstly, I analyse the company in order to determine all the risks that it is facing and the methods that are used to hedge these risks. Secondly, I perform an analysis of the different financial instruments that can be used to hedge the risks and I determine the ones which correspond the best to the requirements of the company. 

Thirdly, I devote the follow-up to the revision of the technique used to hedge the Foreign Exchange Risk. For that, I develop a theoretical model of a perfect hedge, which uses the hedging technique which I recommend to use at the second step. I also develop some basic principles, that has to be respected for the hedge. I also do an analysis of the functioning of the company, in order to compare the basic principles of a perfect hedge and how it is realised in the company. The purpose is to suggest various improvements, based on what has to be done and what is actually done, in order to enhance the hedge.

Finally, I provide a tool that can be used to calculate the hedges, that have to be done, as well as to track the hedges. This tool is the conclusion of the previous steps. Indeed, this tool is based on the theoretical model developed but this model is applied to the reality of the company and it considers the improvements suggested at the third step.

Hedging techniques --- Commodity price risk --- Foreign exchange risk --- Revision --- Optimization --- Sciences économiques & de gestion > Finance

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Commodity prices may be a leading indicator of inflation, because of the relative importance of flexible auction markets for the determination of these prices. Empirical tests using data for the large industrial countries as a group suggest that changes in commodity prices tend to lead those in consumer prices, and that the inclusion of commodity prices significantly improves the fit of regressions of a multi-country consumer price index. However, there does not appear to be a reliable long-run relationship between the level of commodity prices and the level of consumer prices.

Commodity Markets --- Commodity price indexes --- Commodity prices --- Consumer price indexes --- Consumer prices --- Deflation --- Inflation --- Macroeconomics --- Price indexes --- Price Level --- Prices --- United States

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This guidance note describes how to use the Excel-based template developed by the Fiscal Affairs Department (FAD) of the IMF accompanying the note “How to Design a Fiscal Strategy in a Resource-Rich Country.” This template uses data inputs to generate simulations of fiscal policy dynamics. It helps IMF teams and country authorities in RRCs analyze trade-offs associated with alternative fiscal strategies for the use of public resource wealth. Visualizing these trade-offs and assessing their sensitivity to underlying macroeconomic assumptions can help inform policymakers on the most appropriate fiscal strategy, given country-specific circumstances.

Fiscal policy. --- Commodity price indexes --- Deflation --- Fiscal governance --- Fiscal multipliers --- Fiscal Policy --- Fiscal policy --- Inflation --- Macro-fiscal framework --- Macroeconomics --- Price indexes --- Price Level --- Public Finance

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Using the longest dataset publicly available (The Economist's index of industrial commodity prices), we analyze the behavior of real commodity prices over the period 1862-99, and have two main findings. First, while there has been a downward trend in real commodity prices of 1.3 percent per year over the last 140 years, little support is found for a break in the long-run trend decline in commodity prices. Second, there is evidence of a ratcheting up in the variability of price movements. The amplitude of price movements increased in the early 1900s, while the frequency of large price movements increased after the collapse of the Bretton Woods regime of fixed exchange rates in the early 1970s. While there is a downward trend in real commodity prices, this is of little practical policy relevance as it is small and completely dominated by the variability of prices.

Investments: Commodities --- Foreign Exchange --- Macroeconomics --- Business Fluctuations --- Cycles --- Agriculture: Aggregate Supply and Demand Analysis --- Prices --- Commodity Markets --- Price Level --- Inflation --- Deflation --- Investment & securities --- Currency --- Foreign exchange --- Commodity prices --- Commodity price fluctuations --- Commodity price indexes --- Commodities --- Exchange rate arrangements --- Price indexes --- Commercial products --- United States

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In this paper, we analyze how lack of credibility and transparency of monetary and fiscal policies undermines the effectiveness of macroeconomic policies to isolate the economy from commodity price fluctuations. We develop a general equilibrium model for a commodity-exporting economy where macro policies are conducted through rules. We show that the responses of output, aggregate demand, and inflation to an increase in commodity price are magnified when these rules are imperfectly credible and lack transparency. If policies are imperfectly credible, then transparency helps private agents to learn the systematic behavior of the autorities, reducing the effects of commodity prices shocks. Coherent with the model, we show cross-country evidence that monetary policy transparency and fiscal credibility reduce the incidence of export price volatility on output volatility. Also, our results indicate that having an explicit fiscal rule and an inflation targeting regime contribute to isolate the economy from terms of trade fluctuations.

Commodity control. --- International commodity control --- Commercial policy --- Cartels --- Producers' associations --- Inflation --- Macroeconomics --- Public Finance --- Monetary Policy --- Central Banks and Their Policies --- Policy Objectives --- Policy Designs and Consistency --- Policy Coordination --- Fiscal Policies and Behavior of Economic Agents: General --- Commodity Markets --- Fiscal Policy --- Price Level --- Deflation --- Macroeconomics: Consumption --- Saving --- Wealth --- Commodity price shocks --- Fiscal policy --- Commodity price fluctuations --- Consumption --- Prices --- National accounts --- Economics --- United States