Is the Business Cycle of Argentina 'Different'?

Abstract

Despite the relative success of Real Business Cycle (RBC) models to replicate key moments of the business cycles of the US and several European countries, economic research in Latin America is still largely dominated by the more traditional view that monetary factors play a predominant role in the economic fluctuations experienced by countries in that part of the world. The different theoretical approach is often justified on the grounds that business cycles in Latin America are "different." However, few comparative studies have analyzed in a systematic way the relevant differences between the business cycles of Latin America and those of the US and Europe.This paper makes a modest contribution towards that literature by presenting "business cycles facts" for Argentina following as closely as possible the empirical methodology and statistics that other studies have used to characterize the business cycles of the US and European countries.Overall, we do not find any a priori evidence that dynamic general equilibrium models allowing real shocks to be a source of business cycles cannot potentially account for as large a portion of the economic fluctuations of Argentina as they do for those of the US and several European countries.

JEL Classification: E32