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Back-splicing of cement production and characterization of its economic cycle: The case of Chile (1991-2015)

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  • Idrovo Aguirre, Byron
  • Contreras, Javier

Abstract

Cement is a non-storable input in the medium- and long-term. The evidence in Chile shows that cement supply and demand are in relative equilibrium, so the demand or supply of this input can measure the activity in the structural construction or work. The aim of this paper is to backcast the series of cement production since January 2009, using as an instrument the connection of the series of cement sales, available on a monthly basis from 1991- 2013. To this end, we apply the Johansen cointegration method. Then, a model of state-space is proposed to characterize the cycle of cement production, taking its connection with investment in construction into account. Indeed, cement production, technically, is a leading indicator of sectoral investment.

Suggested Citation

  • Idrovo Aguirre, Byron & Contreras, Javier, 2015. "Back-splicing of cement production and characterization of its economic cycle: The case of Chile (1991-2015)," MPRA Paper 67387, University Library of Munich, Germany, revised 20 Sep 2015.
    • Handle: RePEc:pra:mprapa:67387
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    References listed on IDEAS

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    More about this item

    Keywords

    cement; construction investment; retropolation; cointegration; state-space; Chile;
    All these keywords.

    JEL classification:

    • C10 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - General
    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation

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