The spillover effects of economic policy uncertainty in Latin America on the Spanish economy
Javier Pérez () and
Latin American Journal of Central Banking (previously Monetaria), 2021, vol. 2, issue 2
We construct economic policy uncertainty (EPU) indexes for a number of Latin American (LA) economies (Argentina, Brazil, Chile, Colombia, Mexico, Peru, Venezuela) and the region as a whole, based on reports in the Spanish press. Our measures are comparable across countries. We study the macroeconomic effects of LA EPU shocks on the analyzed American economies and the Spanish economy. To study the international spillover effects on the Spanish economy, we carry out two exercises by means of vector auto-regression models. First, we estimate responses to unexpected shocks in LA EPU of the quotations of Spanish companies which are highly exposed to Latin America. Second, we study the impact of LA EPU shocks on Spanish macroeconomic aggregates. Unexpected shocks in LA EPU significantly dampen commercial relationships between Spain and LA countries. Spanish firms decrease their exports and foreign direct investments in LA countries that experience negative shocks in EPU.
Keywords: Economic policy uncertainty; Uncertainty shocks; Latin America's economies (search for similar items in EconPapers)
JEL-codes: C43 D8 E2 E3 (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
Gold Open Access
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:eee:lajcba:v:2:y:2021:i:2:s2666143821000090
Access Statistics for this article
Latin American Journal of Central Banking (previously Monetaria) is currently edited by Manuel Ramos-Francia
More articles in Latin American Journal of Central Banking (previously Monetaria) from Elsevier
Bibliographic data for series maintained by Catherine Liu ().