The contribution of domestic, regional, and international factors to Latin America’s business cycle

Melisso Boschi () and Alessandro Girardi

No 105, ISAE Working Papers from ISTAT - Italian National Institute of Statistics - (Rome, ITALY)

Abstract: This paper quantifies the relative contribution of domestic, regional and international factors to the fluctuation of domestic output in six key Latin American (LA) countries: Argentina, Bolivia, Brazil, Chile, Mexico and Peru. Using quarterly data over the period 1980:1-2003:4, a multivariate, multi-country time series model was estimated to study the economic interdependence among LA countries and, in addition, between each of them and the three world largest industrial economies: the US, the Euro Area and Japan. Falsifying a common suspicion, it is shown that the proportion of LA countries’ domestic output variability explained by industrial countries’ factors is modest. By contrast, domestic and regional factors account for the main share of output variability at all simulation horizons. The implications for the choice of the exchange rate regime are also discussed.

Keywords: International business cycle; Latin America; exchange rate regimes; Global VAR methodology; VEC models. (search for similar items in EconPapers)
JEL-codes: C32 E32 F31 F41 (search for similar items in EconPapers)
Pages: 36 pages
Date: 2008-11
New Economics Papers: this item is included in nep-cba, nep-dev, nep-mac and nep-opm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

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Related works:
Journal Article: The contribution of domestic, regional and international factors to Latin America's business cycle (2011)
Working Paper: The contribution of domestic, regional and international factors to Latin America's business cycle (2009)
Working Paper: THE CONTRIBUTION OF DOMESTIC, REGIONAL AND INTERNATIONAL FACTORS TO LATIN AMERICA'S BUSINESS CYCLE (2008)
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