TY - BOOK ID - 11260202 TI - Accounting for output drops in Latin America AU - Lama, Ruy AU - International Monetary Fund. PY - 2009 SN - 1451916493 1282842889 1451991304 9786612842887 1451872143 146233055X PB - [Washington, D.C.] : International Monetary Fund, DB - UniCat KW - Business & Economics KW - Economic Theory KW - Business cycles KW - Business forecasting KW - Business KW - Business forecasts KW - Forecasting, Business KW - Economic cycles KW - Economic fluctuations KW - Forecasting KW - Economic forecasting KW - Cycles KW - Investments: Bonds KW - Macroeconomics KW - Production and Operations Management KW - Labor Economics: General KW - Production KW - Cost KW - Capital and Total Factor Productivity KW - Capacity KW - Prices, Business Fluctuations, and Cycles: General (includes Measurement and Data) KW - General Financial Markets: General (includes Measurement and Data) KW - Financial Economics KW - Labour KW - income economics KW - Economic growth KW - Investment & securities KW - Economic theory & philosophy KW - Labor KW - Total factor productivity KW - Bonds KW - Financial frictions KW - Labor economics KW - Industrial productivity KW - Argentina UR - https://www.unicat.be/uniCat?func=search&query=sysid:11260202 AB - This paper evaluates what type of models can account for the recent episodes of output drops in Latin America. I develop an open economy version of the business cycle accounting methodology (Chari, Kehoe, and McGrattan, 2007) in which output fluctuations are decomposed into four sources: total factor productivity (TFP), a labor wedge, a capital wedge, and a bond wedge. The paper shows that the most promising models are the ones that induce fluctuations of TFP and the labor wedge. On the other hand, models of fnancial frictions that translate into a bond or capital wedge are not successful in explaining output drops in Latin America. The paper also discusses the implications of these results for policy analysis using alternative DSGE models. ER -