Oil price shock on Peru’s main macroeconomic variables, 2001-2019: A multivariate analysis
DOI:
https://doi.org/10.58720/bis.v3i2.101Keywords:
oil price, macroeconomic variables, BCRP, VAR model, PeruAbstract
In the Peruvian economy, a large part of the productive sectors depend on oil, so an increase in its price has a strong impact, since Peru is an importer of this fuel. Therefore, the objective was to analyze the variation in the international price of oil and its reaction on the main macroeconomic variables. The research methodology was non experimental quantitative and longitudinal explanatory. The variables were taken from the Central Reserve Bank of Peru (BCRP) and Macrotrends, the data were quarterly series covering from the first quarter of 2001 to the fourth quarter of 2019. For the analysis of variables, the structural vector autoregressive model (SVAR) was applied, especially the impulse-response function. The results found showed that the GDP does not respond in the short term to this shock; moreover, domestic demand falls, since Peruvian inflation responds by growing in the short term; this shock also generates a depreciation of the national currency in the face of a rise in the exchange rate. In conclusion, the Peruvian economy is affected by the variation in the price of oil in the short term, since in the long term the Peruvian government takes subsidiary measures, such as reducing the selective consumer tax (ISC) or through the Fund for the Stabilization of the Prices of Fuels Derived from Petroleum (FEPC).
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