The right fit for the wrong reasons: real business cycle in an oil-dependent economy



Document title: The right fit for the wrong reasons: real business cycle in an oil-dependent economy
Journal: Latin american journal of economics
Database: CLASE
System number: 000448513
ISSN: 0719-0425
Authors: 1
Institutions: 1Harvard University, Center for International Development, Cambridge, Massachusetts. Estados Unidos de América
Year:
Season: Dic
Volumen: 53
Number: 1
Pages: 61-94
Country: Chile
Language: Español
Document type: Artículo
Approach: Analítico, descriptivo
English abstract Venezuela has an oil-dependent economy subject to large exogenous shocks and a rigid labor market. These features go straight to the heart of two weaknesses of real business cycle (RBC) theory widely reported in the literature: neither shocks are volatile enough nor real salaries sufficiently flexible as required by the RBC framework to replicate the behavior of the economy. We calibrate a basic RBC model and compare a set of relevant statistics from RBC-simulated time series with actual data for Venezuela and the benchmark case of the United States (1950-2008). Despite Venezuela being a heavily regulated economy, RBC-simulated series provide a good fit, in particular with regard to labor markets
Disciplines: Economía
Keyword: Economía de energéticos,
Venezuela,
Economía nacional,
Petróleo,
Dependencia petrolera,
Variables macroeconómicas,
Mercado laboral,
Choques externos,
Ciclos económicos,
Ciclos de negocios
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