{
  "title": "The Sources of Macroeconomic Fluctuations in Developing Countries: Brazil and Korea",
  "publication": "IMF Working Papers, February 1, 1996",
  "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2016/12/30/the-sources-of-macroeconomic-fluctuations-in-developing-countries-brazil-and-korea-1874",
  "canonical": "https://www.imf.org/en/publications/wp/issues/2016/12/30/the-sources-of-macroeconomic-fluctuations-in-developing-countries-brazil-and-korea-1874",
  "overlayPath": "/en/publications/wp/issues/2016/12/30/the-sources-of-macroeconomic-fluctuations-in-developing-countries-brazil-and-korea-1874/index.md",
  "summary": "This paper studies the sources of macroeconomic fluctuations in developing countries using a structural VAR approach. Identification of the sources is achieved using long-run restrictions derived from a theoretical model of a small open economy encompassing a large number of macroeconomic paradigms;",
  "sections": [
    {
      "heading": "Overview",
      "content": "- Paper studies the sources of macroeconomic fluctuations in developing countries using a structural VAR approach.\n- Identification uses long-run restrictions derived from a theoretical model of a small open economy encompassing a large number of macroeconomic paradigms; the short-run dynamics are unrestricted.\n- Framework applied to Brazil and Korea."
    },
    {
      "heading": "Methodology",
      "content": "- Structural VAR approach with:\n  - Long-run restrictions from a theoretical small open economy model.\n  - Unrestricted short-run dynamics."
    },
    {
      "heading": "Key Findings",
      "content": "- Supply shocks are the main source of GDP fluctuations, even in the short run.\n- Aggregate demand shocks:\n  - Important in the short run in Brazil.\n  - Not important in the short run in Korea.\n- External shocks explain a small fraction of the variance of output.\n- Real exchange rate is driven mainly by fiscal shocks.\n- Nominal shocks appear to have little impact on output and the real exchange rate."
    },
    {
      "heading": "Subjects and Keywords",
      "content": "- Subject: Economic theory, Fiscal policy, Foreign exchange, Inflation, Oil prices, Prices, Real exchange rates, Supply shocks\n- Keywords: effects of adjustment program, exchange rate, exchange rate shock, Inflation, inflation rate, input price, Korea's output response, linear transformation, Oil prices, open economy, Real exchange rates, Supply shocks, WP\n\n---\n\n\nSource: https://www.imf.org/en/publications/wp/issues/2016/12/30/the-sources-of-macroeconomic-fluctuations-in-developing-countries-brazil-and-korea-1874"
    }
  ],
  "bullets": [
    "[Markdown version](/en/publications/wp/issues/2016/12/30/the-sources-of-macroeconomic-fluctuations-in-developing-countries-brazil-and-korea-1874/index.md)",
    "[Structured JSON version](/en/publications/wp/issues/2016/12/30/the-sources-of-macroeconomic-fluctuations-in-developing-countries-brazil-and-korea-1874/index.json)",
    "[Bundle manifest](/en/publications/wp/issues/2016/12/30/the-sources-of-macroeconomic-fluctuations-in-developing-countries-brazil-and-korea-1874/bundle-manifest.json)",
    "Authors: Jorge Roldos, Willy A Hoffmaister",
    "Published: February 1, 1996",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781451922127.001",
    "Paper studies the sources of macroeconomic fluctuations in developing countries using a structural VAR approach.",
    "Identification uses long-run restrictions derived from a theoretical model of a small open economy encompassing a large number of macroeconomic paradigms; the short-run dynamics are unrestricted.",
    "Framework applied to Brazil and Korea.",
    "Structural VAR approach with:",
    "Supply shocks are the main source of GDP fluctuations, even in the short run.",
    "Aggregate demand shocks:",
    "External shocks explain a small fraction of the variance of output.",
    "Real exchange rate is driven mainly by fiscal shocks.",
    "Nominal shocks appear to have little impact on output and the real exchange rate.",
    "Subject: Economic theory, Fiscal policy, Foreign exchange, Inflation, Oil prices, Prices, Real exchange rates, Supply shocks",
    "Keywords: effects of adjustment program, exchange rate, exchange rate shock, Inflation, inflation rate, input price, Korea's output response, linear transformation, Oil prices, open economy, Real exchange rates, Supply shocks, WP"
  ],
  "alternates": {
    "markdown": "/en/publications/wp/issues/2016/12/30/the-sources-of-macroeconomic-fluctuations-in-developing-countries-brazil-and-korea-1874/index.md",
    "json": "/en/publications/wp/issues/2016/12/30/the-sources-of-macroeconomic-fluctuations-in-developing-countries-brazil-and-korea-1874/index.json",
    "bundleManifest": "/en/publications/wp/issues/2016/12/30/the-sources-of-macroeconomic-fluctuations-in-developing-countries-brazil-and-korea-1874/bundle-manifest.json"
  },
  "generatedAtUtc": "2026-09-17T07:57:10.703Z"
}