The aim of this paper is to promote a business cycles analysis for Brazil and Argentina, emphasizing the differences in their economic processes. The differences in economic fluctuations of each country are seen as a result of their differences in economic foundations and structural characteristics. For this purpose, the MS-VAR – Markov switching vector autoregression – approach is used. Univariate models are estimated to real GDP data for the period from 1990 to 2000. The results suggest that business cycles of Brazil and Argentina are, individually, very different. Firstly, Brazilian economy experienced, in average, high growth rate in expansion regime, especially, in high-growth regime. This was not the case of Argentina. Secondly, recessive periods were, in average, more severe in Argentina than in Brazil. While the average growth rate estimated in the recessive regime was –5,8% for Argentina, for Brazil this value was zero. Therefore, results show that these countries cannot be viewed as similar. Furthermore, there is evidence that the assumption of a data generating process shifting only two regimes is too restrictive to capture recessions as well as high growth periods.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. 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.
Publisher Info
Paper provided by Central Bank of Brazil, Research Department in its series Working Papers Series with number
80.