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The Contribution Of Domestic, Regional And International Factors To Latin America'S Business Cycle

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  • Melisso Boschi

    ()

  • Alessandro Girardi

    ()

Abstract

This paper quantifies the relative contribution of domestic, regional and international factors to the fluctuation of domestic output in six key Latin American (LA) countries: Argentina, Bolivia, Brazil, Chile, Mexico and Peru. Using quarterly data over the period 1980:1-2003:4, a multi-variate, multicountry time series model was estimated to study the economic interdependence among LA countries and, in addition, between each of them and the three world largest industrial economies: the US, the Euro Area and Japan. Falsifying a common suspicion, it is shown that the proportion of LA countries’ domestic output variability explained by industrial countries’ factors is modest. By contrast, domestic and regional factors account for the main share of output variability at all simulation horizons. The implications for the choice of the exchange rate regime are also discussed.

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Bibliographic Info

Paper provided by Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University in its series CAMA Working Papers with number 2008-33.

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Length: 31 pages
Date of creation: Oct 2008
Date of revision:
Handle: RePEc:een:camaaa:2008-33

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Citations

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Cited by:
  1. Melisso Boschi, 2012. "Long- and short-run determinants of capital flows to Latin America: a long-run structural GVAR model," Empirical Economics, Springer, Springer, vol. 43(3), pages 1041-1071, December.
  2. Melisso Boschi & Massimiliano Marzo & Simone Salotti, 2013. "Domestic Versus International Determinants Of European Business Cycles: A GVAR Approach," CAMA Working Papers, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University 2013-28, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
  3. Guglielmo Maria Caporale & Alessandro Girardi, 2012. "Business Cycles, International Trade and Capital Flows: Evidence from Latin America," CESifo Working Paper Series 4006, CESifo Group Munich.
  4. Daniel Zerfu Gurara & Mthuli Ncube, 2013. "Working Paper 183 - Global Economic Spillovers to Africa- A GVAR Approach," Working Paper Series, African Development Bank 981, African Development Bank.
  5. repec:udt:wpbsdt:2012-03 is not listed on IDEAS
  6. Guglielmo Maria Caporale & Alessandro Girardi, 2011. "Fiscal Spillovers in the Euro Area," Discussion Papers of DIW Berlin 1164, DIW Berlin, German Institute for Economic Research.
  7. Fatma Pinar Erdem & Erdal Ozmen, 2014. "Exchange Rate Regimes and Business Cycles: An Empirical Investigation," ERC Working Papers, ERC - Economic Research Center, Middle East Technical University 1404, ERC - Economic Research Center, Middle East Technical University, revised Jun 2014.

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