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dc.titleThe Evolution of External Shocks and Macrofiscal Outcomes in the Andes
dc.contributor.authorSaboin, José Luis
dc.contributor.authorHirs, Jorge
dc.contributor.authorAndrian, Leandro Gaston
dc.contributor.authorChávez, Augusto
dc.contributor.orgunitCountry Department Andean Group
dc.coverageBolivia
dc.coverageColombia
dc.coverageEcuador
dc.coveragePeru
dc.coverageVenezuela
dc.date.available2024-05-14T00:05:00
dc.date.issue2024-05-14T00:05:00
dc.description.abstractThe abundance of natural resources can adversely affect the macroeconomic stability of countries. Developing economic institutions that support the proper management of extractive industry resources is one of the fundamental factors for maintaining macroeconomic stability and generating long-term economic growth. This paper evaluates the impact of terms-of-trade shocks on fiscal performance and economic growth 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 those shocks, this paper makes use of a TV-SVAR model. This method allows us to evaluate whether the presence of fiscal institutions change their sensitivity to external disturbances. The results presented in this paper show a time-varying dynamic of both (1) terms-of-trade shocks and (2) the sensitivity of the Andean regions economies to such shocks, although with marked heterogeneity across countries. This heterogeneity coincides with the uneven development of the economic institutions in the countries of the region. The results highlight the importance of developing adequate economic policy frameworks in order to adequately mitigate the volatility in the terms-of-trade.
dc.format.extent50
dc.identifier.doihttp://dx.doi.org/10.18235/0012972
dc.identifier.urlhttps://publications.iadb.org/publications/english/document/The-Evolution-of-External-Shocks-and-Macrofiscal-Outcomes-in-the-Andes.pdf
dc.language.isoen
dc.publisherInter-American Development Bank
dc.subjectFiscal Policy
dc.subjectNatural Resource
dc.subjectEconomy
dc.subjectExtractive Industry
dc.subjectCommodity Price
dc.subjectMacroeconomic Policy
dc.subjectEconomic Development
dc.subjectGDP Growth
dc.subjectFiscal Management
dc.subject.jelcodeE62 - Fiscal Policy
dc.subject.jelcodeD72 - Political Processes: Rent-Seeking, Lobbying, Elections, Legislatures, and Voting Behavior
dc.subject.jelcodeF3 - International Finance
dc.subject.jelcodeH60 - National Budget, Deficit, and Debt: General
dc.subject.keywordsFiscal policy;Natural Resource Management;Time-Varying Bayesian SVAR
dc.typeTechnical Notes
idb.identifier.pubnumberIDB-TN-02944
idb.operationRG-T3717
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