Dirty Float, Commodity Prices, and Macroeconomic Fluctuations: A Model for Peru

Waldo Mendoza and Rafael Vilca
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Waldo Mendoza: Pontificia Universidad Católica del Perú
Rafael Vilca: Pontificia Universidad Católica del Perú

Revista Economía, 2024, vol. 47, issue 94, 76-105

Abstract: This paper presents a macroeconomic model that replicates the key stylized facts of the Peruvian economy, namely the strong dependence of private investment and GDP on mineral export prices, within a framework where the Central Reserve Bank of Peru (BCRP) operates under a dirty float regime and the Ministry of Economy and Finance (MEF) follows fiscal rules that endogenize public spending. The model is designed for undergraduate students and instructors of economics and builds on the work of Dancourt (2009), Dancourt & Mendoza (2016), and Mendoza (2019).

Keywords: Dirty float; commodities; macroeconomic fluctuations (search for similar items in EconPapers)
JEL-codes: E32 F31 F32 (search for similar items in EconPapers)
Date: 2024
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