La evolución de los shocks externos y los resultados macrofiscales en los Andes

Leandro Andrian; Jose Luis Saboin; Jorge Hirs-Garzon; Augusto Chávez Baquero

doi:10.24215/18521649e039

Authors

Leandro Andrian Banco Interamericano de Desarrollo
Jose Luis Saboin Banco Interamericano de Desarrollo
Jorge Hirs-Garzon Universidad de Texas A&M, Estados Unidos
Augusto Chávez Baquero Banco Interamericano de Desarrollo

DOI:

https://doi.org/10.24215/18521649e039

Keywords:

fiscal policy, natural resource management, time-varying bayesian SVAR

Abstract

The abundance of natural resources can adversely affect the macroeconomic stability of countries. Developing economic institutions that allow for the proper management of extractive industry resources is one of the fundamental factors for maintainin macroeconomic stability and generating long-term economic growth. This paper evaluates the impact of terms of trade shocks on fiscal performance and economic growt in the countries of the Andean region. To adequately capture the variation in both the magnitude of shocks and the sensitivity of economic and fiscal variables to terms of trade changes, this paper makes use of a TV-SVAR model. This method allows us to evaluate whether fiscal institutions have changed the country’s sensitivity to external disturbances. The results found in this paper show a time-varying dynamic of both (i) terms of trade shocks and (ii) the sensitivity of the Andean region’s economies to them, although with marked heterogeneity across countries. This heterogeneity co-incides with the uneven institutional development in the economic institutions in the countries of the region. The results highlight the importance of developing adequate economic policy frameworks in order to adequately face the volatility in terms of trade.

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Author Biographies

Leandro Andrian, Banco Interamericano de Desarrollo

Leandro Andrián is a Lead Economist at the IDB. Leandro Andrián is a Senior Economist at the IDB. He holds a PhD in Economics from Iowa State University. Before his doctoral studies, he worked at the Ministry of Economy of the Province of Buenos Aires in Argentina. He was a professor at the Catholic University of La Plata (Argentina) in macroeconomics and a research assistant at the National University of La Plata (Argentina). He joined the IDB in 2009, worked in the fiscal sector, was the country economist for Bolivia and Colombia, and is currently a lead economist for Venezuela. He has published several papers on macroeconomics, fiscal, energy transition, growth, economic cycles, and poverty.

Jose Luis Saboin, Banco Interamericano de Desarrollo

José Luis Saboin is an Economics Specialist in the Caribbean Country Department of the Inter-American Development Bank (IDB), where he holds the position of Country Economist for The Bahamas. Previously, José Luis worked in the Andean Country Department of the IDB and before that in the Western Hemisphere Department of the International Monetary Fund (IMF). He has led and co-led multiple research and data collection projects across Latin America. His areas of research and interest include development macroeconomics, international monetary economics, fiscal policy in resource-rich countries, nowcasting and technology adoption, which have been published at the IMF, IDB and other peer-reviewed journals. He has an Economics degree from the Andrés Bello Catholic University in Venezuela, a Master in Economic Policy Management from Columbia University in New York City (USA) and a PhD in Economics from George Mason University in Virginia (USA).

Jorge Hirs-Garzon, Universidad de Texas A&M, Estados Unidos

Jorge Hirs-Garzon is a Ph.D. student in Economics at Texas A&M University, with a focus on macroeconomics, monetary policy, and fiscal policy. His research experience includes roles at the Inter-American Development Bank and Banco de la República (Colombia's central bank), where he contributed to policy-oriented research and financial stability analyses. Jorge has published in journals such as the European Journal of Political Economy, Economic Systems, North American Journal of Economics and Finance, Journal of Commodity Markets, and International Finance, covering topics from fiscal cycles to global uncertainty impacts and interactions between oil and financial markets.

Augusto Chávez Baquero, Banco Interamericano de Desarrollo

Augusto Chávez Baquero is part of the economic team of the Andean Group Countries Department (CAN) of the Inter-American Development Bank (IDB). He is an economist graduated from the School of Economics of the Universidad Nacional de Colombia and has experience in macroeconomic analysis and regional sector studies. Before joining the IDB as a consultant, he collaborated in the Public Policy Monitoring and Evaluation Directorate of the National Planning Department (DNP) and in the macroeconomic modeling department of Banco de la República (Central Bank of Colombia).

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