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The macroeconomic effects of oil shocks in three Latin American economies

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  • Juan Carlos, Alarcón
  • Juan Carlos, Molero
  • Fernando, Pérez de Gracia

Abstract

In this paper we study the impact of oil price shocks on real economic activity and inflation rates in three Latin American economies (Brazil, Colombia and Peru) using a Vector AutoRegressive (VAR) model over the period 1991:M01-2014:M01. We also consider different oil shock specifications. We find a strong and prolonged increase in inflation in Brazil after an oil price shock and a negative effect with respect to economic growth. We find less significant results for Colombia and Peru that can be explained by the distorted pass-through of oil price shocks to domestic prices.

Suggested Citation

  • Juan Carlos, Alarcón & Juan Carlos, Molero & Fernando, Pérez de Gracia, 2017. "The macroeconomic effects of oil shocks in three Latin American economies," MPRA Paper 128257, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:128257
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    References listed on IDEAS

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    JEL classification:

    • F31 - International Economics - - International Finance - - - Foreign Exchange
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy

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