Trade linkages and growth in Latin America: A time-varying SVAR approach

Diego Winkelried and Miguel Saldarriaga

No 2012-011, Working Papers from Banco Central de Reserva del Perú

Abstract: This paper examines how shocks originated in large economies around the globe have transmitted to the growth rates of Latin American countries. For this purpose, a highly parsimonious structural VAR model – identified through bilateral trade linkages – is proposed, tested, estimated and simulated. Since trade weights evolve through time, the effect of shocks are time-varying. Thus, we are able to quantify how growth in the region has been affected by tighter trading linkages with fast-growing emerging economies, and how it has responded to a new world trade structure, featuring China as a major player. It is found that about half of the vigourous growth reported in Latin American countries by the end of the 2000s can be attributed to (direct and especially indirect) multiplier effects induced by the spectacular growth of the Chinese economy over the same period.

Keywords: Latin America; China; trade linkages; time-varying structural VAR (search for similar items in EconPapers)
JEL-codes: C32 C50 E32 F44 O54 (search for similar items in EconPapers)
Date: 2012-04
New Economics Papers: this item is included in nep-lam
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.bcrp.gob.pe/docs/Publicaciones/Documen ... -trabajo-11-2012.pdf Application/pdf

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:rbp:wpaper:2012-011

Access Statistics for this paper

More papers in Working Papers from Banco Central de Reserva del Perú Contact information at EDIRC.
Bibliographic data for series maintained by Research Unit ().