Potential GDP Growth in Venezuela : A Structural Time Series Approach

Real GDP and oil prices are decomposed into common stochastic trend and cycle processes using structural time series models. Potential real GDP is represented by the level of the trend component of real GDP. The potential rate of growth of real GDP...

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Main Author:	Cuevas, Mario A.
Format:	Policy Research Working Paper
Language:	English en_US
Published:	World Bank, Washington, D.C. 2013
Subjects:	GROSS DOMESTIC PRODUCT OIL PRICES ECONOMIC POLICY PRICE INCREASES BONDS BUSINESS CYCLES CENTRAL BANK CPI DEVELOPED COUNTRIES DEVELOPMENT ECONOMICS DISCOUNT RATE ECONOMETRIC ANALYSIS ECONOMETRIC MODELING ECONOMETRICS ECONOMIC ACTIVITY ECONOMIC CONDITIONS ECONOMIC DYNAMICS ECONOMIC FLUCTUATIONS ECONOMIC STATISTICS ECONOMIC TIME SERIES ENDOGENOUS VARIABLES EXCHANGE RATE EXOGENOUS VARIABLES EXPORTS GDP GROWTH POTENTIAL GROWTH RATE INFLATION INTEREST RATE INTEREST RATES MACROECONOMIC MANAGEMENT MACROECONOMICS MULTIPLIER EFFECTS OIL OIL EXPORTS OIL PRICE OIL SECTOR OPEC POTENTIAL OUTPUT PRICE ELASTICITY PRICE INCREASES PRICE OF OIL QUOTAS RANDOM WALK REAL GDP TERMS OF TRADE TIME SERIES UNEMPLOYMENT
Online Access:	http://documents.worldbank.org/curated/en/2002/04/1769435/potential-gdp-growth-venezuela-structural-time-series-approach http://hdl.handle.net/10986/14807

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recordtype	oai_dc
spelling	okr-10986-148072021-04-23T14:03:20Z Potential GDP Growth in Venezuela : A Structural Time Series Approach Cuevas, Mario A. GROSS DOMESTIC PRODUCT OIL PRICES ECONOMIC POLICY PRICE INCREASES BONDS BUSINESS CYCLES CENTRAL BANK CPI DEVELOPED COUNTRIES DEVELOPMENT ECONOMICS DISCOUNT RATE ECONOMETRIC ANALYSIS ECONOMETRIC MODELING ECONOMETRICS ECONOMIC ACTIVITY ECONOMIC CONDITIONS ECONOMIC DYNAMICS ECONOMIC FLUCTUATIONS ECONOMIC STATISTICS ECONOMIC TIME SERIES ENDOGENOUS VARIABLES EXCHANGE RATE EXOGENOUS VARIABLES EXPORTS GDP GROWTH POTENTIAL GROWTH RATE INFLATION INTEREST RATE INTEREST RATES MACROECONOMIC MANAGEMENT MACROECONOMICS MULTIPLIER EFFECTS OIL OIL EXPORTS OIL PRICE OIL PRICES OIL SECTOR OPEC POTENTIAL OUTPUT PRICE ELASTICITY PRICE INCREASES PRICE OF OIL QUOTAS RANDOM WALK REAL GDP TERMS OF TRADE TIME SERIES UNEMPLOYMENT Real GDP and oil prices are decomposed into common stochastic trend and cycle processes using structural time series models. Potential real GDP is represented by the level of the trend component of real GDP. The potential rate of growth of real GDP is represented by the stochastic drift element of the trend component. Cuevas finds that there is a strong association at the trend and cycle frequencies between real GDP and the real price of oil. This association is also robust in the presence of key economic policy variables. From 1970-80, when the underlying annual rate of increase of the real price of oil was 12 percent, the underlying annual rate of increase of potential GDP in Venezuela was 2.6 percent. By contrast, from 1981-2000 when the underlying rate of increase of the real price of oil was -5 percent, the underlying growth rate of potential GDP fell 1.5 percent. However, the strength of association between the underlying growth of oil prices and real GDP has fallen considerably since the early 1980s, suggesting that oil cannot be relied on as an engine for future growth in Venezuela. 2013-08-05T19:04:55Z 2013-08-05T19:04:55Z 2002-04 http://documents.worldbank.org/curated/en/2002/04/1769435/potential-gdp-growth-venezuela-structural-time-series-approach http://hdl.handle.net/10986/14807 English en_US Policy Research Working Paper;No.2826 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, D.C. Publications & Research :: Policy Research Working Paper Publications & Research Latin America & Caribbean Venezuela, Republica Bolivariana de
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English en_US
topic	GROSS DOMESTIC PRODUCT OIL PRICES ECONOMIC POLICY PRICE INCREASES BONDS BUSINESS CYCLES CENTRAL BANK CPI DEVELOPED COUNTRIES DEVELOPMENT ECONOMICS DISCOUNT RATE ECONOMETRIC ANALYSIS ECONOMETRIC MODELING ECONOMETRICS ECONOMIC ACTIVITY ECONOMIC CONDITIONS ECONOMIC DYNAMICS ECONOMIC FLUCTUATIONS ECONOMIC STATISTICS ECONOMIC TIME SERIES ENDOGENOUS VARIABLES EXCHANGE RATE EXOGENOUS VARIABLES EXPORTS GDP GROWTH POTENTIAL GROWTH RATE INFLATION INTEREST RATE INTEREST RATES MACROECONOMIC MANAGEMENT MACROECONOMICS MULTIPLIER EFFECTS OIL OIL EXPORTS OIL PRICE OIL PRICES OIL SECTOR OPEC POTENTIAL OUTPUT PRICE ELASTICITY PRICE INCREASES PRICE OF OIL QUOTAS RANDOM WALK REAL GDP TERMS OF TRADE TIME SERIES UNEMPLOYMENT
spellingShingle	GROSS DOMESTIC PRODUCT OIL PRICES ECONOMIC POLICY PRICE INCREASES BONDS BUSINESS CYCLES CENTRAL BANK CPI DEVELOPED COUNTRIES DEVELOPMENT ECONOMICS DISCOUNT RATE ECONOMETRIC ANALYSIS ECONOMETRIC MODELING ECONOMETRICS ECONOMIC ACTIVITY ECONOMIC CONDITIONS ECONOMIC DYNAMICS ECONOMIC FLUCTUATIONS ECONOMIC STATISTICS ECONOMIC TIME SERIES ENDOGENOUS VARIABLES EXCHANGE RATE EXOGENOUS VARIABLES EXPORTS GDP GROWTH POTENTIAL GROWTH RATE INFLATION INTEREST RATE INTEREST RATES MACROECONOMIC MANAGEMENT MACROECONOMICS MULTIPLIER EFFECTS OIL OIL EXPORTS OIL PRICE OIL PRICES OIL SECTOR OPEC POTENTIAL OUTPUT PRICE ELASTICITY PRICE INCREASES PRICE OF OIL QUOTAS RANDOM WALK REAL GDP TERMS OF TRADE TIME SERIES UNEMPLOYMENT Cuevas, Mario A. Potential GDP Growth in Venezuela : A Structural Time Series Approach
geographic_facet	Latin America & Caribbean Venezuela, Republica Bolivariana de
relation	Policy Research Working Paper;No.2826
description	Real GDP and oil prices are decomposed into common stochastic trend and cycle processes using structural time series models. Potential real GDP is represented by the level of the trend component of real GDP. The potential rate of growth of real GDP is represented by the stochastic drift element of the trend component. Cuevas finds that there is a strong association at the trend and cycle frequencies between real GDP and the real price of oil. This association is also robust in the presence of key economic policy variables. From 1970-80, when the underlying annual rate of increase of the real price of oil was 12 percent, the underlying annual rate of increase of potential GDP in Venezuela was 2.6 percent. By contrast, from 1981-2000 when the underlying rate of increase of the real price of oil was -5 percent, the underlying growth rate of potential GDP fell 1.5 percent. However, the strength of association between the underlying growth of oil prices and real GDP has fallen considerably since the early 1980s, suggesting that oil cannot be relied on as an engine for future growth in Venezuela.
format	Publications & Research :: Policy Research Working Paper
author	Cuevas, Mario A.
author_facet	Cuevas, Mario A.
author_sort	Cuevas, Mario A.
title	Potential GDP Growth in Venezuela : A Structural Time Series Approach
title_short	Potential GDP Growth in Venezuela : A Structural Time Series Approach
title_full	Potential GDP Growth in Venezuela : A Structural Time Series Approach
title_fullStr	Potential GDP Growth in Venezuela : A Structural Time Series Approach
title_full_unstemmed	Potential GDP Growth in Venezuela : A Structural Time Series Approach
title_sort	potential gdp growth in venezuela : a structural time series approach
publisher	World Bank, Washington, D.C.
publishDate	2013
url	http://documents.worldbank.org/curated/en/2002/04/1769435/potential-gdp-growth-venezuela-structural-time-series-approach http://hdl.handle.net/10986/14807
_version_	1764430002239045632

Potential GDP Growth in Venezuela : A Structural Time Series Approach

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