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The 2000s commodity boom and the exchange rate in Argentina

Author

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  • Luciano Campos

Abstract

Purpose - This paper aims to estimate the impact of the 2000s commodity boom in the major Latin American economies. Design/methodology/approach - The author used a structural vector autorregresive analysis where the selection of variables is conditional on a New Keynesian Model for a small open economy. Findings - The evidence indicates that the Argentinean nominal exchange rate appreciated less while its output and inflation grew more than those of the other nations when subjected to commodity shocks. These results are interpreted as a more aggressive leaning-against-the-wind intervention by Argentina, probably to avoid the Dutch disease. Although the effects with regard to output were indeed stronger in Argentina, this was only at the expense of higher inflation and volatility suffered during the boom. Originality/value - At the time of the writing of this paper, no work had evaluated Argentinean underperformace to the manner in which its exchange rate policy was handled in comparison with the rest of the region during the boom. This paper intends to fill this gap.

Suggested Citation

  • Luciano Campos, 2019. "The 2000s commodity boom and the exchange rate in Argentina," Applied Economic Analysis, Emerald Group Publishing Limited, vol. 27(79), pages 46-61, August.
    • Handle: RePEc:eme:aeapps:aea-06-2019-0002
    DOI: 10.1108/AEA-06-2019-0002
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    Citations

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    Cited by:

    1. Luciano Campos & Danilo Leiva-León & Steven Zapata- Álvarez, 2022. "Latin American Falls, Rebounds and Tail Risks," Borradores de Economia 1201, Banco de la Republica de Colombia.
    2. Graña-Colella, Santiago & Silva Neira, Ignacio, 2024. "Export manufacture competitiveness and commodity dependence: An empirical analysis of the Dutch Disease on Argentina and Chile during the commodity price boom," IPE Working Papers 232/2024, Berlin School of Economics and Law, Institute for International Political Economy (IPE).
    3. Ameyaw, Emmanuel, 2024. "Business cycles in a cocoa and gold economy: Commodity price shocks do not always matter," Resources Policy, Elsevier, vol. 91(C).

    More about this item

    Keywords

    Argentina; Commodity prices; Exchange rate policy; High inflation; Structural VARs; C32; F31; F41; Q02;
    All these keywords.

    JEL classification:

    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • F31 - International Economics - - International Finance - - - Foreign Exchange
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
    • Q02 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - Commodity Market

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