We use more than one century of Argentine and Mexican data to estimate the structural parameters of a small-open-economy real-business-cycle model driven by nonstationary productivity shocks. We find that the RBC model does a poor job at explaining business cycles in emerging countries. We then...

We use more than one century of Argentine and Mexican data to estimate the structural parameters of a small-open-economy real-business-cycle model driven by nonstationary productivity shocks. We find that the RBC model does a poor job at explaining business cycles in emerging countries. We then...

Despite the relative success of Real Business Cycle (RBC) models to replicate key moments of the business cycles of the US and several European countries, economic research in Latin America is still largely dominated by the more traditional view that monetary factors play a predominant role in...