Is the business cycle of Argentina "different?"

Despite the relative success of Real Business Cycle (RBC) models to replicate key moments of the business cycles of the United States and several European countries, economic research in Latin America tends to take the more traditional view that monetary factors play a predominant role in the economic fluctuations of countries in that part of the world. The different theoretical approach is often justified on the grounds that business cycles in Latin America are "different." However, few comparative studies have analyzed the relevant difference between the business cycles of Latin America and those of the United States and Europe. In this article, Finn Kydland and Carlos Zarazaga present business-cycle facts for Argentina, following as closely as possible the empirical methodology and statistics other studies have used to characterize U.S. and European business cycles. Overall, the authors find no a priori evidence that dynamic general equilibrium models, in which real shocks are the only source of economic fluctuations, cannot potentially account for as much of the Argentinean business cycle as such models do for business cycles in the United States and Europe.