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Perturbaciones Internacionales y Fluctuaciones del Producto Interno Bruto en una Economía en Desarrollo: Evidencia de República Dominicana para el Período 1998-2008
[International Shocks and GDP fluctuations in a Developing Economy: Evidence from the Dominican Republic for the Period 1998-2008]

The aim of this work is to contribute to the literature of the role of foreign factors in determining the fluctuations of the Gross Domestic Product (GDP) in small, open and developing countries. The following external variables are considered: terms of trade, foreign GDP, foreign inflation and international interest rates. Using the Dominican Republic as a case study, a macroeconomic model of short-term fluctuations which considers the main mechanisms of propagation of external shocks in explaining fluctuations in GDP is specified and estimated. The simulation results suggest that external variables play an important role in generating fluctuations in the Dominican GDP. Of all the variables, the cycles of the United States output, has the greatest impact. The terms of trade shocks are transferred approximately 1 to 1 in the long term. Finally, the effects of foreign interest rates on domestic fluctuations are low and gradual.

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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 38987.

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Date of creation: 2009
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Handle: RePEc:pra:mprapa:38987
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  2. Boschi, Melisso & Girardi, Alessandro, 2009. "The contribution of domestic, regional and international factors to Latin America's business cycle," MPRA Paper 28147, University Library of Munich, Germany.
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  13. Edwards, Sebastian & Levy Yeyati, Eduardo, 2005. "Flexible exchange rates as shock absorbers," European Economic Review, Elsevier, vol. 49(8), pages 2079-2105, November.
  14. Adrian Pagan & Don Harding, 2005. "A suggested framework for classifying the modes of cycle research," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 20(2), pages 151-159.
  15. Jordi Gali & Mark Gertler, 2000. "Inflation Dynamics: A Structural Econometric Analysis," NBER Working Papers 7551, National Bureau of Economic Research, Inc.
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  19. Paul Cashin, 2004. "Caribbean Business Cycles," IMF Working Papers 04/136, International Monetary Fund.
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