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Trade shoks and aggregate fluctuations in an oil-exporting economy


Sáez, Francisco J. y Puch, Luis A. (2003) Trade shoks and aggregate fluctuations in an oil-exporting economy. [ Documentos de Trabajo del Instituto Complutense de Análisis Económico (ICAE); nº 0301, 2003, ] (No publicado)

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In this paper we analyze the role of trade shocks in shaping aggregate fluctuations in Venezuela from 1950 to 1995. To this end a stochastic general equilibrium
model of a small open economy whose main productive activity rests in the exports of a single basic product is specied. Shocks to the terms of trade which
are directly associated to oil price changes are modelled as a foreign transfer. We
find that this approach gives predictions that are consistent with the time series properties of Venezuela when i) the income effect of consumption more than
compensates the substitution effect that generates the oil transfer and, ii) there
is imperfect capital mobility. In particular, our model specification captures the
observed patterns of the main aggregates after the oil resource boom of 1974.

Tipo de documento:Documento de trabajo o Informe técnico
Información Adicional:

JEL classification: E32, E37

Palabras clave:Trade shocks. Aggregate fuctuations. Emerging economies
Materias:Ciencias Sociales > Economía > Macroeconomía
Título de serie o colección:Documentos de Trabajo del Instituto Complutense de Análisis Económico (ICAE)
Código ID:7694

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