Short Run Savings Fluctuations and Export Shocks. Theory and Evidence for Latin-America

Juan Echeverry

Borradores de Economia from Banco de la Republica de Colombia

Abstract: A basic theoretical model of a small open economy within the framework of intertemporal maximation is used to analyze the effects of nominal export shocks. The model helps in explaining the close relationschip that is found between export shocks and short run fluctuations of domestic savings in the major Latin-American economies. The savings/GDP ratio moves fairly closely with exports/GDP, indicating that individuals perceive almost all major changes in exports as transitory. An explanation is proposed for Colombia's fall in the savings rate during the 1990s, and the puzzling cases of Mexico and PEru during the 1980s. Exports volatility and prolonged overvaluation of the exchange rate are associated with savings rate volatility.

Date: 1996-03
New Economics Papers: this item is included in nep-mac
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Citations: View citations in EconPapers (6)

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https://doi.org/10.32468/be.48 (application/pdf)

Related works:
Working Paper: Short run savings fluctuations and export shocks theory and evidence for Latin America (1996)
Working Paper: SHORT RUN SAVINGS FLUCTUATIONS AND EXPORT SHOCKS.THEORY AND EVIDENCE FOR LATIN-AMERICA (1996)
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Persistent link: https://EconPapers.repec.org/RePEc:bdr:borrec:048

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