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Theoretical aggregate supply and demand model for the venezuelan economy

Author

Listed:
  • José Mora

    (Ph.D. en Economía de la University of Illinois at Chicago. Departamento de Economía. Pontificia Universidad Javeriana Seccional Cali. Colombia. Teléfono: 5723218200.)

Abstract

This paper presents an aggregate demand and supply model for the Venezuelan economy assuming two productive sectors (oil and non-oil), a fixed exchange rate regime, and an absolute restriction to capital mobility. The model helps explain the impacts that fiscal, monetary, and productivity domestic and foreign shocks have on real output, inflation and overall economic activity in Venezuela. Although the results are consistent with economic theory, it is necessary to emphasize that, contrary to its standard postulates, a Bolivar devaluation contracts real output and raises the price level and that an oil price increase causes an increase in real output but triggers an ambiguous effect on the price level.

Suggested Citation

  • 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.
    • Handle: RePEc:ula:econom:v:43:y:2018:i:46:p:65-100
    as

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    File URL: ftp://iies.faces.ula.ve/Pdf/Revista46/Rev46Mora.pdf
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    References listed on IDEAS

    as
    1. José U. Mora Mora, 2013. "Fluctuaciones económicas bajo régimen de cambio fijo en una economía pequena con dos sectores," Revista CIFE, Universidad Santo Tomás, June.
    2. 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.
    Full references (including those not matched with items on IDEAS)

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    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.

    More about this item

    Keywords

    Aggregate demand; aggregate supply; business cycles; exchange rate regimes.;
    All these keywords.

    JEL classification:

    • B22 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Macroeconomics
    • E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian; Modern Monetary Theory
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • N56 - Economic History - - Agriculture, Natural Resources, Environment and Extractive Industries - - - Latin America; Caribbean

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