What Drives Business Cycles And International Trade In Emerging Market Economies?
AbstractThis paper investigates the role of domestic and externalfactors in explaining business cycle and internationaltrade developments in fifteen emergingmarket economies. Results from sign-restrictedVARs show that developments in real output, inflationand international trade variables are dominatedby domestic shocks. External shocks, on average, explaina fraction of no more than 10% of the variationin the endogenous variables considered. Concerningimpulse responses, consumer prices and real importsare overall the endogenous variables most affected bydomestic disturbances. Consumer prices are mostlydriven by technology and risk premium shocks. Theshocks inducing the largest effects tend to be monetarydisturbances, which can be traced to unpredictablemonetary policy. These shocks generate relativelylarge impacts on real imports, which -owing tomuted reactions in real exports-, carry over to thetrade balance, alongside more modest changes inconsumer prices and real output.
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Bibliographic InfoArticle provided by BANCO DE LA REPÚBLICA - ESPE in its journal ENSAYOS SOBRE POLÍTICA ECONÓMICA.
Volume (Year): (2010)
Issue (Month): ()
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business cycles; international trade; emerging markets; structural shocks.;
Find related papers by JEL classification:
- C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
- E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
- F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
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- Schmidt-Hebbel, Klaus & Tapia, Matias, 2002. "Inflation targeting in Chile," The North American Journal of Economics and Finance, Elsevier, vol. 13(2), pages 125-146, August.
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