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Backcasting cement production and characterizing cement’s economic cycles for Chile 1991–2015

Author

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  • Byron J. Idrovo-Aguirre

    (Cámara Chilena de la Construcción)

  • Javier E. Contreras-Reyes

    (Universidad de Valparaíso)

Abstract

Cement is a non-storable input in the medium and long term. The evidence in Chile shows that cement supply and demand are in relative equilibrium, so the demand or supply of this input can measure the activity in the structural construction or work. The aim of this paper is to backcast the series of cement production since January 2009, using as an instrument the connection of the series of cement sales, available on a monthly basis from 1991–2015. To this end, we apply the Johansen cointegration method. Then, a model of state space is proposed to characterize the cycle of cement production, taking its connection with investment in construction into account. Indeed, cement production, technically, is a leading indicator of sectoral investment.

Suggested Citation

  • Byron J. Idrovo-Aguirre & Javier E. Contreras-Reyes, 2019. "Backcasting cement production and characterizing cement’s economic cycles for Chile 1991–2015," Empirical Economics, Springer, vol. 57(5), pages 1829-1852, November.
    • Handle: RePEc:spr:empeco:v:57:y:2019:i:5:d:10.1007_s00181-018-1506-8
    DOI: 10.1007/s00181-018-1506-8
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    Cited by:

    1. Byron J. Idrovo-Aguirre & Javier E. Contreras-Reyes, 2021. "The Response of Housing Construction to a Copper Price Shock in Chile (2009–2020)," Economies, MDPI, vol. 9(3), pages 1-11, June.
    2. Contreras-Reyes, Javier E. & Idrovo-Aguirre, Byron J., 2020. "Backcasting and forecasting time series using detrended cross-correlation analysis," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 560(C).
    3. Byron J. Idrovo-Aguirre & Francisco J. Lozano & Javier E. Contreras-Reyes, 2021. "Prosperity or Real Estate Bubble? Exuberance Probability Index of Real Housing Prices in Chile," IJFS, MDPI, vol. 9(3), pages 1-24, September.

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    More about this item

    Keywords

    Cement; Construction investment; Retropolation; Cointegration; State space; Chile;
    All these keywords.

    JEL classification:

    • C1 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General
    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment
    • L6 - Industrial Organization - - Industry Studies: Manufacturing
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity

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