Macroeconomic Volatility during Argentina's Import Substitution Stage
AbstractIn this article, I analyze the characteristics and sources of macroeconomic volatility for the case of Argentina during the import substitution industrialization (ISI). This case is particularly relevant since Argentina has been one of the most extreme examples of macroeconomic volatility in the Latin American region. I estimated a small vector auto regression (VAR) to approximate the main dynamic features of the Argentine economy during the ISI: the balance of trade improving but the 'contractionary' effect of devaluation, and the short-run persistence of 'political-economic' switching regimes. Counterfactual experimentation showed the impossibility of reaching a complete economic stabilization during the historical period under analysis and the existence of sharp tradeoffs among the internal balance, the external balance and policy volatility. It also indicated that at least a half of the observed policy volatility could be attributed to exogenous shocks. These results suggest that the performance of the Argentine economy during the ISI could have been better under more rational policy management but, surprisingly, that the improvement would not be as large as one would expect.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by Taylor and Francis Journals in its journal International Review of Applied Economics.
Volume (Year): 15 (2001)
Issue (Month): 2 ()
Contact details of provider:
Web page: http://taylorandfrancis.metapress.com/link.asp?target=journal&id=102219
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Krugman, Paul & Taylor, Lance, 1978.
"Contractionary effects of devaluation,"
Journal of International Economics,
Elsevier, vol. 8(3), pages 445-456, August.
- Rudiger Dornbusch & Sebastian Edwards, 1991. "Macroeconomic Populism in Latin America," NBER Working Papers 2986, National Bureau of Economic Research, Inc.
- Perron, P, 1988.
"The Great Crash, The Oil Price Shock And The Unit Root Hypothesis,"
338, Princeton, Department of Economics - Econometric Research Program.
- Perron, Pierre, 1989. "The Great Crash, the Oil Price Shock, and the Unit Root Hypothesis," Econometrica, Econometric Society, vol. 57(6), pages 1361-1401, November.
- Hamilton, James D, 1989. "A New Approach to the Economic Analysis of Nonstationary Time Series and the Business Cycle," Econometrica, Econometric Society, vol. 57(2), pages 357-84, March.
- Dornbusch, Rudiger & Edwards, Sebastian, 1989.
"The macroeconomics of populism in Latin America,"
Policy Research Working Paper Series
316, The World Bank.
- Christopher A. Sims, 1986. "Are forecasting models usable for policy analysis?," Quarterly Review, Federal Reserve Bank of Minneapolis, issue Win, pages 2-16.
- Lucas, Robert Jr, 1976. "Econometric policy evaluation: A critique," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 1(1), pages 19-46, January.
- Mercado, P Ruben & Kendrick, David A & Amman, Hans, 1998.
"Teaching Macroeconomics with GAMS,"
Society for Computational Economics, vol. 12(2), pages 125-49, October.
- Ricardo Hausmann & Michael Gavin, 1996. "Securing Stability and Growth in a Shock Prone Region: The Policy Challenge for Latin America," Research Department Publications 4020, Inter-American Development Bank, Research Department.
- Favero, C. & Hendry, D., 1990. "Testing The Lucas Critique: A Review," Economics Series Working Papers 99101, University of Oxford, Department of Economics.
- Engle, Robert F. & Hendry, David F., 1993.
"Testing superexogeneity and invariance in regression models,"
Journal of Econometrics,
Elsevier, vol. 56(1-2), pages 119-139, March.
- Engle, R. & Hendry, D., 1990. "Testing Super Exogeneity And Invariance In Regression Models," Economics Series Working Papers 99100, University of Oxford, Department of Economics.
- Neil R. Ericsson, 1991.
"Cointegration, exogeneity, and policy analysis: an overview,"
International Finance Discussion Papers
415, Board of Governors of the Federal Reserve System (U.S.).
- Ericsson, Neil R., 1992. "Cointegration, exogeneity, and policy analysis: An overview," Journal of Policy Modeling, Elsevier, vol. 14(3), pages 251-280, June.
- Hamilton, James D., 1990. "Analysis of time series subject to changes in regime," Journal of Econometrics, Elsevier, vol. 45(1-2), pages 39-70.
- Robert B. Litterman, 1984. "The costs of intermediate targeting," Working Papers 254, Federal Reserve Bank of Minneapolis.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Michael McNulty).
If references are entirely missing, you can add them using this form.