Testing Real Business Cycle Models in an Emerging Economy

Raphael Bergoeing and Raimundo Soto

No 126, Documentos de Trabajo from Centro de Economía Aplicada, Universidad de Chile

Abstract: RBC models have been successfull when applied to developed economies: their abilities in replicating the data of emerging countries remain largely unexplored. The rapid but unstable growth process in developing countries and their relatively less developed market structure pose a formidable challenge to neoclessical general equilibrium models. Using data of the Chilean economy, we explore the effect of market rigidities and macroeconomic policies on the dynamics of consumption, investment, inflation and factor markets. We find that business cycles models replicate much of the observed fluctuations of real and monetary variables in the Chilean economy, depite its idiosyncratic economic structure. Using a calibrated model we find that technology shocks, fiscal policies and labor market rigidities are the main sources of economic cycles, while monetary policies and wage indexation play a minor role. Econometric tests support the use of our calibrated model as an adequate representation of the Chilean data.

Date: 2002
References: Add references at CitEc
Citations: View citations in EconPapers (15)

Downloads: (external link)
http://www.cea-uchile.cl/wp-content/uploads/doctrab/ASOCFILE120030327145932.pdf (application/pdf)

Related works:
Chapter: Testing Real Business Cycle Models in a Emerging Economy (2005)
Working Paper: Testing Real Business Cycles Models in an Emerging Economy (2002)
Working Paper: Testing Real Business Cycle Models in an Emerging Economy (2002)
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:edj:ceauch:126

Access Statistics for this paper

More papers in Documentos de Trabajo from Centro de Economía Aplicada, Universidad de Chile Contact information at EDIRC.
Bibliographic data for series maintained by ().