Commodity exports depend on global demand and prices, but the increasing volatility of real exchange rates (RER) introduces an additional factor. Thus, this paper studies the RER volatility dynamics, estimated through GARCH and IGARCH models for Brazil, Chile, New Zealand, and Uruguay from 1990 to 2013. We study the impact of RER volatility on total exports using Johansen's methodology, including proxies for global demand and international prices. The results suggest that exports depend positively on global demand and international prices for all countries; however, conditional RER volatility resulted significant and negative only for Uruguay, in the short-and long-run.
Background: Investment is a key factor to analyze an economy's growth, as it increases the productive capacity, either by expanding the capital stock or by incorporating new technology that makes the production process more efficient. In Uruguay, investment has substantially increased in recent years, both overall and in the sectoral domain. This would have occurred because of strong growth in the period, as well as on account of government policies on investment promotion. Growth and investment evolution, together with employment, have undergone a long history in economic theory, with some empirical studies supporting the principle that investment precedes growth, and others providing evidence to the hypothesis that growth determines investment. Methods: Through a model with vector error correction (VECM), we found a longterm relationship between non-agricultural GDP, investment, and urban workers of Uruguay. Results: In this model, we observe a positive relationship between GDP and the other two variables, where GDP precedes both urban workers and investment. Conclusions: The relationship between employment and investment is not so clear and, in some cases, appears to be negative, which could be showing a phenomenon of saving labor investment, or investment in less labor-intensive sectors.
Argentinian and brazilian demands for tourism in Uruguay are analyzed separately. these countries represent 66.25% of the receptive tourism in Uruguay; however, they present different characteristics. two long-run relationships among tourism expenditures—income and real touristic
exchange rate—are found by applying the cointegrating methodology. the income–demand elasticity is positive and larger than one in both cases, confirming the hypothesis that tourism is a luxury good. moreover, this elasticity is smaller in Argentina (1.899) than in the brazilian
case (2.679). the relatively larger inelasticity in the Argentinian case could be due to the important percentage of Argentinian with second homes in Uruguay. In addition, the real touristic exchange rate elasticity is positive and more inelastic in the Argentinian case (0.623) than in brazil
(1.168).
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