Direct and Indirect Impacts of Oil Price Shocks on Ecuador’s Economic Cycles (2000:01-2020:01)

Fernando Martin-Mayoral and Alexander Carvajal ()

Estudios de Economia, 2023, vol. 50, issue 2 Year 2023, 379-412

Abstract: We analyse the non-linear relationship between oil price shocks and the real business cycle in Ecuador, a dollarized economy where oil exports are the country’s main source of foreign exchange. We estimate several autoregressive Markov switching models for the period 2000:01-2020:01 to identify the differentiated impact of nominal oil price shocks on real GDP in expansion and slowdown regimes. We find evidence that oil price shocks have an asymmetric effect on Ecuador’s economic growth, with a larger impact during slowdowns. They also affect all components of aggregate demand differently in each regime, with a larger impact on investment during expansions.

Keywords: Business cycle; Oil prices; Nonlinear models; Markov Re-gime-Switching Model; Ecuador. (search for similar items in EconPapers)
JEL-codes: E32 F63 O11 Q02 (search for similar items in EconPapers)
Date: 2023
References: Add references at CitEc
Citations:

Downloads: (external link)
https://estudiosdeeconomia.uchile.cl/index.php/EDE/article/view/73218/75078 (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:udc:esteco:v:50:y:2023:i:2:p:379-412

Access Statistics for this article

Estudios de Economia is currently edited by Rómulo Chumacero

More articles in Estudios de Economia from University of Chile, Department of Economics Contact information at EDIRC.
Bibliographic data for series maintained by Verónica Kunze ().