Dinámica económica y coordinación de políticas fiscal – monetaria en América Latina: Evaluación a través de una DSGE

Valdivia, Daney and Pérez, Danyira (2013): Dinámica económica y coordinación de políticas fiscal – monetaria en América Latina: Evaluación a través de una DSGE.

Abstract

The recent sovereign debt and subprime crises affected the world economy and highlighted the role and importance of policy coordination against adverse scenarios (price, demand, supply and external shocks, etc.). This paper asses the effectiveness of fiscal and monetary policy coordination, for a set of Latin American countries (Bolivia, Brazil, Chile, Colombia, Peru, Uruguay, Venezuela) during the periods 2007-2008 and 2009-2010, through the application of dynamic stochastic general equilibrium model specified in parameters for each economy and comparable in structure to each other. The results show that a combined shock of fiscal and monetary policy have important effects when faced with an adverse situation, especially in preserving price stability and economic growth in the short and long run, as opposed to individual shocks, which in some cases be offset by not pursuing a common goal. In the first case, an active monetary policy, helped by fiscal intervention was more effective in maintaining macroeconomic stability, and in the second case the determinant was fiscal policy. Additionally, the framework proposed would contribute to an adoption and evaluation of fiscal and monetary policies through various instruments.

• Item Type: MPRA Paper
• English Title: Dynamic economic and coordination on fiscal – monetary policies in Latin América: Evaluation through a DSGE model
• Language: Spanish
• Keywords: policy coordination, dynamic stochastic general equilibrium, macroeconomic stability.
• Subjects: E - Macroeconomics and Monetary Economics > E3 - Prices, Business Fluctuations, and Cycles > E32 - Business Fluctuations ; Cycles; E - Macroeconomics and Monetary Economics > E6 - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook > E61 - Policy Objectives ; Policy Designs and Consistency ; Policy Coordination; E - Macroeconomics and Monetary Economics > E6 - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook > E63 - Comparative or Joint Analysis of Fiscal and Monetary Policy ; Stabilization ; Treasury Policy; O - Economic Development, Innovation, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O40 - General

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