THE RIGHT FIT FOR THE WRONG REASONS: REAL BUSINESS CYCLE IN AN OIL-DEPENDENT ECONOMY

THE RIGHT FIT FOR THE WRONG REASONS: REAL BUSINESS CYCLE IN AN OIL-DEPENDENT ECONOMY

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 flexib...

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Autor principal: Santos,Miguel
Lenguaje:English
Publicado: Pontificia Universidad Católica de Chile. Instituto de Economía. 2016
Materias:
Macroeconomics
RBC
oil shocks
labor markets
Venezuela
Acceso en línea:http://www.scielo.cl/scielo.php?script=sci_arttext&pid=S0719-04332016000100004
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spelling oai:scielo:S0719-043320160001000042017-02-02THE RIGHT FIT FOR THE WRONG REASONS: REAL BUSINESS CYCLE IN AN OIL-DEPENDENT ECONOMYSantos,Miguel Macroeconomics RBC oil shocks labor markets Venezuela 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.info:eu-repo/semantics/openAccessPontificia Universidad Católica de Chile. Instituto de Economía.Latin american journal of economics v.53 n.1 20162016-12-01text/htmlhttp://www.scielo.cl/scielo.php?script=sci_arttext&pid=S0719-04332016000100004en10.7764/LAJE.53.1.61
institution Scielo Chile
collection Scielo Chile
language English
topic Macroeconomics
RBC
oil shocks
labor markets
Venezuela
spellingShingle Macroeconomics
RBC
oil shocks
labor markets
Venezuela
Santos,Miguel
THE RIGHT FIT FOR THE WRONG REASONS: REAL BUSINESS CYCLE IN AN OIL-DEPENDENT ECONOMY
description 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.
author Santos,Miguel
author_facet Santos,Miguel
author_sort Santos,Miguel
title THE RIGHT FIT FOR THE WRONG REASONS: REAL BUSINESS CYCLE IN AN OIL-DEPENDENT ECONOMY
title_short THE RIGHT FIT FOR THE WRONG REASONS: REAL BUSINESS CYCLE IN AN OIL-DEPENDENT ECONOMY
title_full THE RIGHT FIT FOR THE WRONG REASONS: REAL BUSINESS CYCLE IN AN OIL-DEPENDENT ECONOMY
title_fullStr THE RIGHT FIT FOR THE WRONG REASONS: REAL BUSINESS CYCLE IN AN OIL-DEPENDENT ECONOMY
title_full_unstemmed THE RIGHT FIT FOR THE WRONG REASONS: REAL BUSINESS CYCLE IN AN OIL-DEPENDENT ECONOMY
title_sort right fit for the wrong reasons: real business cycle in an oil-dependent economy
publisher Pontificia Universidad Católica de Chile. Instituto de Economía.
publishDate 2016
url http://www.scielo.cl/scielo.php?script=sci_arttext&pid=S0719-04332016000100004
work_keys_str_mv AT santosmiguel therightfitforthewrongreasonsrealbusinesscycleinanoildependenteconomy
AT santosmiguel rightfitforthewrongreasonsrealbusinesscycleinanoildependenteconomy
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