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Relative importance of foreign and domestic shocks in the Venezuelan economy

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  • José U. Mora

    (Department of Economics, University of Vermont. Departamento de Economía, Universidad de Los Andes)

Abstract

This paper uses a Cholesky Factorization in a var analysis to investigate the relative importance of foreign and domestic shocks in the Venezuelan economy during the 1960:i- 2004:ii period. The economy is assumed to be driven by foreign (U. S. gdp and oil prices) and domestic (exchange rate, fiscal, monetary, inflation, and output) orthogonal shocks. As shown by the empirical evidence foreign shocks tend to be relatively more important than domestic shocks. Precisely, oil price and U. S. gdp shocks tend to have permanent effects on the main macroeconomic aggregates. Monetary policy only has temporary effects on output and the nominal exchange rate.

Suggested Citation

  • José U. Mora, 2008. "Relative importance of foreign and domestic shocks in the Venezuelan economy," Economía, Instituto de Investigaciones Económicas y Sociales (IIES). Facultad de Ciencias Económicas y Sociales. Universidad de Los Andes. Mérida, Venezuela, vol. 33(25), pages 61-86, january-j.
    • Handle: RePEc:ula:econom:v:33:y:2008:i:25:p:61-86
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    File URL: ftp://iies.faces.ula.ve/Pdf/Revista25/Rev25Mora.pdf
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    References listed on IDEAS

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    7. Pagliacci, Carolina & Ruda, Mario, 2004. "¿Tienen Efectos las Acciones de Política Monetaria? Un análisis de Intencionalidad [Do monetary policy actions have an effect? An intentionality analysis]," MPRA Paper 106674, University Library of Munich, Germany.
    8. Karras, Georgios, 1993. "Sources of U.S. macroeconomic fluctuations: 1973-1989," Journal of Macroeconomics, Elsevier, vol. 15(1), pages 47-68.
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    Citations

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    Cited by:

    1. Jose Ustorgio Mora Mora, 2015. "A supply and demand model for the Venezuelan economy," Working Papers 14, Faculty of Economics and Management, Pontificia Universidad Javeriana Cali.
    2. Acevedo Rueda, Rafael Alexis & Mora Mora, José U. & Harmath Fernández, Pedro Alexander, 2012. "La brecha del producto y el producto potencial en Venezuela: una estimación SVAR [Output Gap and Potential GDP in Venezuela: A SVAR Estimation]," MPRA Paper 58691, University Library of Munich, Germany, revised 2013.
    3. José Mora, 2018. "Theoretical aggregate supply and demand model for the venezuelan economy," Economía, Instituto de Investigaciones Económicas y Sociales (IIES). Facultad de Ciencias Económicas y Sociales. Universidad de Los Andes. Mérida, Venezuela, vol. 43(46), pages 65-100, july-dece.

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    More about this item

    Keywords

    Time-series models; business fluctuations; latin american economies.;
    All these keywords.

    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; State Space Models
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • O54 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Latin America; Caribbean

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