The sources of macroeconomic fluctuations in developing countries: Brazil and Korea

This paper studies the sources of macroeconomic fluctuations in small open economies using astructural VAR approach. The identification of the structural shocks is based primarily on long-run restrictions that are in the spirit of Blanchard and Quah (1989). The evidence from Brazil and Korea suggest...

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Bibliographic Details
Published inJournal of macroeconomics Vol. 23; no. 2; pp. 213 - 239
Main Authors Hoffmaister, Alexander W., Roldôs, Jorge E.
Format Journal Article
LanguageEnglish
Published Amsterdam Elsevier Inc 01.04.2001
Elsevier
Elsevier Science Ltd
SeriesJournal of Macroeconomics
Subjects
Americas
Asia
Decomposition
Developing countries
Economic growth
Economic instability
Economic shock
Exchange rates
Floating exchange rates
Foreign exchange rates
GDP
Gross Domestic Product
Inflation
LDCs
Macroeconomics
Market economies
Mathematical models
Monetary policy
Open economies
Prices
Studies
Supply and demand
Brazil
Korea
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Summary:This paper studies the sources of macroeconomic fluctuations in small open economies using astructural VAR approach. The identification of the structural shocks is based primarily on long-run restrictions that are in the spirit of Blanchard and Quah (1989). The evidence from Brazil and Korea suggests that domestic shocks are the main source of GDP fluctuations, while external shocks explain a small fraction of movements in output. In Korea, the most important domestic shocks are those associated with supply factors. In Brazil, domestic demand factors are important but the high level of macroeconomic instability casts some doubts on the appropriateness of some of the identifying assumptions.
Bibliography:ObjectType-Article-2
SourceType-Scholarly Journals-1
ObjectType-Feature-1
content type line 23
ISSN:0164-0704
1873-152X
DOI:10.1016/S0164-0704(01)00162-8