This paper investigates the impact of external price shocks on private consumption and investment and the sources of fluctuations in these variables, in the case of Argentina, employing structural VEC models (Structural Vector Error Correction) and quarterly data, covering the period...

Dornbusch’s exchange rate overshooting hypothesis (1976) is a central building block in international macroeconomics. This paper analyzes the effects of monetary and other macroeconomic shocks on the real exchange rate in the case of a small economy like Argentina. The paper uses SVAR models...