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Effects of U.S. Quantitative Easing on Latin American Economies

Cesar Carrera, Fernando Pérez Forero () and Nelson R. Ramírez-Rondán

No 35, Working Papers from Peruvian Economic Association

Abstract: Emerging economies have been largely affected by the Fed's quantitative easing (QE) policies. This paper assesses the impact of these measures in terms of key macroeconomic variables for four small open economies in Latin America: Chile, Colombia, Mexico and Peru. We identify a QE policy shock in a structural VAR with block exogeneity (à la Zha, 1999), and we impose a mixture of zero and sign restrictions (à la Arias et al., 2014). Overall, we find that this QE policy shock has significant effects on financial variables such as aggregate credit and the exchange rate. These effects are larger than the ones produced on output and prices.

Keywords: Quantitative Easing; Structural Vector Autoregressions; Sign and Zero Restrictions (search for similar items in EconPapers)
JEL-codes: E43 E51 E52 E58 (search for similar items in EconPapers)
Date: 2015-04
New Economics Papers: this item is included in nep-cba, nep-lam, nep-mac and nep-mon
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Citations: View citations in EconPapers (2)

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Handle: RePEc:apc:wpaper:2015-035