Essays on Economic Policy (ESPE in Spanish) - Institutional Quality and Total Factor Productivity in Latin America and the Caribbean
In the journal Essays on Economic Policy (ESPE) - we disclose the results and policy proposals that arise from academic research carried out at the Banco de la República. When you read us, always keep in mind that the content of our articles, as well as the analyzes and conclusions derived from them, are the sole responsibility of their authors. The material disclosed in our ESPE magazine does not compromise or represent the opinion of Banco de la República or that of its Board of Directors.
En la revista Ensayos sobre Política Económica (ESPE) divulgamos los resultados y las propuestas de política que surgen de investigaciones académicas realizadas en el Banco de la República. Para nosotros es importante que ustedes puedan acceder a los resultados de investigaciones sobre la economía colombiana o temas de importancia para ella, con énfasis en evaluaciones empíricas y/o de relevancia para la conducción de la política económica.
Cuando nos lea, tenga siempre presente que el contenido de nuestros artículos, así como los análisis y conclusiones que de ellos se derivan, son exclusiva responsabilidad de sus autores. El material divulgado en nuestra revista ESPE no compromete ni representa la opinión del Banco de la República ni la de su Junta Directiva.
A major breakthrough in the area of macroeconomics was the unifi cation of business cycle and growth theories by Kydland and Prescott (1982); accordingly, exogenous stochastic technological innovations —i. e. fl uctuations in total factor productivity (TFP) or supply shocks— would explain most recurrent short-term output deviations in industrialized economies. Regarding the sources of fl uctuations in developing countries, domestic shocks, particularly supply-side ones, have also been identifi ed as the main explaining factors of aggregate economic volatility. In this sense, Hoffmaister and Roldós (1997) and Ahmed (2003), in the Latin American context and Arreaza and Dorta (2004), in the case of Venezuela, demonstrate through the estimation of structural vector autoregressions (SVAR) that supply innovations account for more than 50% of total output variations.