Abstract

LANZILOTTA, Bibiana; ZUNINO, Gonzalo  and  MOSTEIRO, Rafael. Structural changes in growth volatility in Uruguay and the Mercosur countries. Desarro. soc. [online]. 2023, n.95, pp.177-205.  Epub Sep 30, 2023. ISSN 0120-3584.  https://doi.org/10.13043/dys.95.5.

This study investigates structural changes in the cyclical volatility of economic growth in Uruguay, Argentina, and Brazil between 1980 and 2018. Focusing on Uruguay, we analyze the presence of structural breaks in the cyclical volatility of GDP while controlling for international volatility, following the procedures originally applied in McConell & Pérez-Quiroz (2000) and Stock & Watson (2002; 2003). The results indicate that following the economic crisis of 2002, Uruguay underwent a shift in the cyclical volatility of GDP, resulting in a reduction of over 50%. Brazil experienced a break in cyclical volatility earlier, in 1994, while Argentina did not exhibit any breaks in its volatility. The results obtained for Uruguay dismiss the notion that the observed reduction in volatility is primarily attributed to a scenario of reduced external volatility, also known as the 'good luck hypothesis.

Keywords : Cycle volatility; structural change; decoupling; Mercosur; Uruguay; E32; C22.

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