Real exchange rate shocks on tradables, nontradables, and the current account: Mexico, 1980–2000
Effects of external and income shocks on consumption and on the current account in Mexico from 1980 to 2000 are investigated. An intertemporal model captures the extent into which non-traded goods consumption affects traded-goods consumption, clarifying the roles of intratemporal or intertemporal substitution. Vector autoregressions (VARs) show that the 1% shock to non-traded goods consumption affects traded-goods consumption by −2% immediately, reverting to zero only after one year, supporting the intratemporal channel. Real exchange rate (RER) shocks exert considerable macroeconomic fluctuations. The 1% shock to RER affects traded goods consumption by −2% immediately, reaching −5% one year later. At the expense of income shocks, RER shocks grow in explanatory power over time: from 20%–25% at 1 quarter to 65%–69% of the variance of traded goods consumption 3 years later. Figures for the current account range from 14% to 68%, while income shocks appear less important. In contrast, for non-traded goods, RER shocks roughly match the quantitative importance of income shocks, reinforcing the theoretical analysis. Copyright Springer-Verlag Berlin Heidelberg 2003
If you experience problems downloading a file, check if you have the proper application to view it first. 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.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 28 (2003)
Issue (Month): 3 (July)
|Contact details of provider:|| Postal: |
Phone: ++43 - (0)1 - 599 91 - 0
Fax: ++43 - (0)1 - 599 91 - 555
Web page: http://link.springer.de/link/service/journals/00181/index.htm
More information through EDIRC
|Order Information:||Web: http://link.springer.de/orders.htm|
When requesting a correction, please mention this item's handle: RePEc:spr:empeco:v:28:y:2003:i:3:p:615-638. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Guenther Eichhorn)or (Christopher F Baum)
If references are entirely missing, you can add them using this form.