External price shocks and real exchange rate. The Dutch disease in the Argentine case

Working papers | 2019 | N 84

Abstract

This work analyzes the impact of external price shocks on the real exchange rate and the existence of the Dutch disease, in the case of the Argentine economy. The effects of shocks in the terms of trade, the supply of the agricultural sector (booming sector) and the real exchange rate on the GDP of the manufacturing sector (or, alternatively, on total GDP) and unemployment rates are considered. . SVAR models are estimated, with long-term restrictions, and quarterly data, covering the period 1993-2018. The results show that external price shocks and agricultural supply shocks positively and permanently affect the manufacturing product and negatively affect unemployment rates, not finding substantial evidence on the existence of the Dutch disease for this economy.

JEL classification: C32, F41