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Short Run Savings Fluctuations and Export Shocks. Theory and Evidence for Latin-America

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  • Juan Carlos Echeverry

Abstract

A basic theoretical model of a small open economy within the framework of intertemporal maximation is used to analyze the effects of nominal export shocks. The model helps in explaining the close relationschip that is found between export shocks and short run fluctuations of domestic savings in the major Latin-American economies. The savings/GDP ratio moves fairly closely with exports/GDP, indicating that individuals perceive almost all major changes in exports as transitory. An explanation is proposed for Colombia's fall in the savings rate during the 1990s, and the puzzling cases of Mexico and PEru during the 1980s. Exports volatility and prolonged overvaluation of the exchange rate are associated with savings rate volatility.

Suggested Citation

  • Juan Carlos Echeverry, 1996. "Short Run Savings Fluctuations and Export Shocks. Theory and Evidence for Latin-America," Borradores de Economia 048, Banco de la Republica de Colombia.
    • Handle: RePEc:bdr:borrec:048
    DOI: 10.32468/be.48
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    Cited by:

    1. Ocampo, José Antonio, 1996. "Capital flows: savings and investment in Colombia, 1990-1995," Sede de la CEPAL en Santiago (Estudios e Investigaciones) 35139, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    2. Martha Misas & Carlos Esteban Posada, 1997. "Determinantes de la Tasa de Ahorro: Una Perspectiva Internacional," Borradores de Economia 068, Banco de la Republica de Colombia.
    3. Alejandro López, 1996. "¿Por qué cayó el ahorro en Colombia a comienzos de la década del noventa?," Coyuntura Económica, Fedesarrollo, December.
    4. Raquel Bernal, 1997. "El ahorro de los hogares: una revisión para el período 1970 - 1993," Coyuntura Económica, Fedesarrollo, March.
    5. Carlos Esteban Posada, 1999. "Tasa de cambio real y consumo : teoria, evidencia y estudios del caso colombiano, 1950-1997," Lecturas de Economía, Universidad de Antioquia, Departamento de Economía, issue 51, pages 7-46, Julio Dic.

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