The Dynamic Effects of Chilean Copper Exports and Chinese Market Disturbances

Eduardo Pardo Piñashca

MPRA Paper from University Library of Munich, Germany

Abstract: This research computes the variance decomposition of Chilean copper exports from 2009 to 2019. In order to evaluate fluctuations of Chilean copper exports, we introduce the Secondary Industry of China labeled as the Chinese market (that briefly involves electricity, construction, manufacturing, and mining sectors) along with other macroeconomic variables commonly used among the literature to comprehend commodity markets. Thus following Blanchard & Quah (1985) methodology we use long-run restrictions for the SVAR model. These restrictions focus on describing small open economies such as Chile. Through the variance decomposition, we found out that Chinese market disturbances have a strong linkage describing fluctuations of Chilean copper exports over the studied period. What’s more, this contribution is even greater than the international copper price and real exchange rate mainly in the long-run. Therefore, this study finds statistical proof of how relevant is the Chinese market to explain the fluctuations of Chilean copper exports even after the 2000’s commodity super cycle.

Keywords: Copper exports; Chile; China; SVAR (search for similar items in EconPapers)
JEL-codes: F41 (search for similar items in EconPapers)
Date: 2020-10-30
New Economics Papers: this item is included in nep-opm
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:103878

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