Common Factors in Latin America's Business Cycles /

This paper constructs new business cycle indices for Argentina, Brazil, Chile, and Mexico based on common dynamic factors extracted from a comprehensive set of sectoral output, external data, and fiscal and financial variables spanning over a century. The constructed indices are used to derive a bus...

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Bibliographic Details
Main Author: Timmermann, Allan
Other Authors: Aiolfi, Marco, Catao, Luis
Format: Journal
Language:English
Published: Washington, D.C. : International Monetary Fund, 2006.
Series:IMF Working Papers; Working Paper ; No. 2006/049
Online Access:Full text available on IMF
Description
Summary:This paper constructs new business cycle indices for Argentina, Brazil, Chile, and Mexico based on common dynamic factors extracted from a comprehensive set of sectoral output, external data, and fiscal and financial variables spanning over a century. The constructed indices are used to derive a business cycle chronology for these countries and characterize a set of new stylized facts. In particular, we show that all four countries have historically displayed a striking combination of high business cycle and persistence relative to benchmark countries, and that such volatility has been time-varying, with important differences across policy regimes. We also uncover a sizeable common factor across the four economies which has greatly limited scope for regional risk sharing.
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Physical Description:1 online resource (64 pages)
Format:Mode of access: Internet
ISSN:1018-5941
Access:Electronic access restricted to authorized BRAC University faculty, staff and students