The 2000s commodity boom and the exchange rate in Argentina

Luciano Campos ()

Applied Economic Analysis, 2019, vol. 27, issue 79, 46-61

Abstract: Purpose - This paper aims to estimate the impact of the 2000s commodity boom in the major Latin American economies. Design/methodology/approach - The author used a structural vector autorregresive analysis where the selection of variables is conditional on a New Keynesian Model for a small open economy. Findings - The evidence indicates that the Argentinean nominal exchange rate appreciated less while its output and inflation grew more than those of the other nations when subjected to commodity shocks. These results are interpreted as a more aggressive leaning-against-the-wind intervention by Argentina, probably to avoid the Dutch disease. Although the effects with regard to output were indeed stronger in Argentina, this was only at the expense of higher inflation and volatility suffered during the boom. Originality/value - At the time of the writing of this paper, no work had evaluated Argentinean underperformace to the manner in which its exchange rate policy was handled in comparison with the rest of the region during the boom. This paper intends to fill this gap.

Keywords: Argentina; Commodity prices; Exchange rate policy; High inflation; Structural VARs; C32; F31; F41; Q02 (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eme:aeapps:aea-06-2019-0002

DOI: 10.1108/AEA-06-2019-0002

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