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Trade shoks and aggregate fluctuations in an oil-exporting economy

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Sáez, Francisco J. and 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 [ Documentos de Trabajo del Instituto Complutense de Análisis Económico (ICAE); nº 01, 2003, ] (Unpublished)

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Abstract

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.


Item Type:Working Paper or Technical Report
Uncontrolled Keywords:Trade shocks. Aggregate fuctuations. Emerging economies
Subjects:Social sciences > Economics > Macroeconomics
JEL:E32, E37
Series Name:Documentos de Trabajo del Instituto Complutense de Análisis Económico (ICAE)
Volume:2003
Number:01
ID Code:7694
Deposited On:04 Mar 2008
Last Modified:21 Jun 2017 12:18

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