The Data folder consists of the following subfolders:

This supplement provides additional result tables and …gures for Dees, Pesaran, Smith and Smith (2010, DPSS) and should be consulted in conjunction with that paper. 2 GVAR data 1979Q1-2006Q4 used to construct the GVAR deviations This version of the GVAR data revises and extends the data set used in Dees, di Mauro, Pesaran

Abstract not found

The international business cycle is very important for Latin America’s economic performance as the recent global crisis vividly illustrated. This paper investigates how changes in trade linkages between China, Latin America, and the rest of the world have altered the transmission mechanism of international business cycles to Latin America. Evidence based on a Global Vector Autoregressive (GVAR) model for 5 large Latin American economies and all major advanced and emerging economies of the world shows that the long-term impact of a China GDP shock on the typical Latin American economy has increased by three times since mid-1990s. At the same time, the long-term impact of a US GDP shock has halved, while the transmission of shocks to Latin America and the rest of emerging Asia (excluding China and India) GDP has not undergone any significant change. Contrary to common wisdom, we find that these changes owe more to the changed impact of China on Latin America’s traditional and largest trading partners than to increased direct bilateral trade linkages boosted by the decade-long commodity price boom. These findings help to explain why Latin America did so well during the global crisis, but point to the risks

An electronic version of the paper may be downloaded • from the SSRN website: www.SSRN.com • from the RePEc website: www.RePEc.org • from the CESifo website: Twww.CESifo-group.org/wpT CESifo Working Paper No. 3447 Beyond the DSGE Straitjacket Academic macroeconomics and the research department of central banks have come to be dominated by Dynamic, Stochastic, General Equilibrium (DSGE) models based on microfoundations of optimising representative agents with rational expectations. We argue that the dominance of this particular sort of DSGE and the resistance of some in the profession to alternatives has become a straitjacket that restricts empirical and theoretical experimentation and inhibits innovation and that the profession should embrace a more flexible approach to macroeconometric modelling. We describe one possible approach. JEL-Code: C100, E100.

In this paper I set up an identical structural New-Keynesian model for each of the eleven original member countries of the Euro area and estimate them with Bayesian methods on the same observable variables. Then all countries are tied together with their respective trade weights to obtain a fully structural multi-country model for the whole currency union. Fiscal multipliers are in the range what the literature suggests. Spillovers on output and inflation of the other countries, however, are negative. This is due to the fact that the interest rate channel is countercyclical and the trade channel extremely small and in this model also countercyclical. The longer the forecast period the more country-specific characteristics play a role explaining the spillovers besides the trade weights. The effects of a coordinated fiscal stimulus are either extremely small or zero. Overall fiscal shocks including fiscal spillovers seem to be not as important as the monetary shock for the evolution of key macroeconomic variables.