Title Intra-regional spillovers in South America : is Brazil systemic after all? / prepared by Gustavo Adler and Sebastián Sosa

Published [Washington, D.C.] : International Monetary Fund, ©2012

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Description 1 online resource (22 pages) : color illustrations Series IMF working paper ; WP/12/145 IMF working paper ; WP/12/145. Contents Cover; Contents; I. Introduction; Figures; 1. Latin America's Large Neighbors, 2010; Tables; 1. Business Cycle Comovement with Large Neighbors, 1990:Q1-2011:Q4; II. Export Linkages with Brazil; 2. South America: Exports of Goods by Region, 1990-2010; 3. South America: Intra-Regional Exports of Goods 1990-2010; III. How Important are Spillovers from Brazil? A VAR Approach; 4. South America's Exports: Exposure to Brazil, 1990-2010; 5. Export Performance in Brazil's Neighbors, 1990-2011; A. Impact of Brazil-Idiosyncratic Shocks; 6. Output Response to a Shock to Brazil's Output B. Amplification of Global Shocks2. Cumulative Impact on Output; 7. Output Response to a VIX Shock: Brazil's Amplifying Role; C. Variance Decomposition Analysis; IV. The Impact of Brazilian Real Depreciations; 8. Variance Decomposition of Output; 9. Real Exchange Rate Depreciation in Brazil: Export Performance in Southern Cone Neighbors; V. Conclusions; 10. Responses to a Shock to Brazil's Real Exchange Rate; Appendix Figures; 1. South America: Exports of Goods by Region, 1990-2010 (Percent of Total Exports); 2. South America: Exports of Goods by Region, 1990-2010 (Percent of GDP) 3. Output Response to a Shock to Global Output4. Output Response to a Shock to the VIX; 5. Output Response to a Shock to Commodity Prices; 6. Output Response to a Shock to Argentina's Output; 7. Real Exchange Rate Depreciation in Brazil: Export Performance in Southern Cone Neighbors; References Summary Shocks stemming from Brazil - the large neighbor in South America - have historically been a source of concern for policy-makers in other countries of the region. This paper studies the importance of Brazil's influence on its neighboring economies, documenting trade linkages over the last two decades and quantifying spillover effects in a Vector Auto Regression setting. While trade linkages with Brazil are significant for the Southern Cone countries (Argentina, Bolivia, Chile, Paraguay, and Uruguay), they are very weak for others. Consistent with this evidence, econometric results show that, while the Southern Cone economies (especially Mercosur's members) are vulnerable to output shocks from Brazil, the rest of South America is not. Spillovers can take two different forms: the transmission of Brazil-specific shocks and the amplification of global shocks--through their impact on Brazil's output. Finally, we also find suggestive evidence that depreciations of Brazil's currency may not have significant impact on output of its key trading partners Notes Title from PDF title page (IMF Web site, viewed June 8, 2012) Bibliography Includes bibliographical references Notes "Western Hemisphere." "June 2012." Subject Industrial productivity -- Brazil -- Econometric models Devaluation of currency -- Brazil -- Econometric models Commerce -- Econometric models Devaluation of currency -- Econometric models Industrial productivity -- Econometric models SUBJECT Brazil -- Commerce -- Southern Cone of South America -- Econometric models Southern Cone of South America -- Commerce -- Brazil -- Econometric models Brazil -- Commerce -- South America -- Econometric models South America -- Commerce -- Brazil -- Econometric models Subject Brazil South America South America -- Southern Cone of South America Form Electronic book Author Sosa, Sebastian, author. International Monetary Fund. Western Hemisphere Department, issuing body. ISBN 9781475576603 1475576609 9781475524123 1475524129 147550408X 9781475504088

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