Impacts Of Exchange Rate Fluctuations And Government Debt On Economic Performance For A Latin American Country | Zendy

Yu Hsing | Zendy; Arístides R. Baraya | Zendy; Michael C. Budden | Zendy; Dawn Wallace | Zendy

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Impacts Of Exchange Rate Fluctuations And Government Debt On Economic Performance For A Latin American Country

Author(s) -

Yu Hsing,

Arístides R. Baraya,

Michael C. Budden,

Dawn Wallace

Publication year - 2011

Publication title -

international business and economics research journal (iber)

Language(s) - English

Resource type - Journals

eISSN - 2157-9393

pISSN - 1535-0754

DOI - 10.19030/iber.v3i3.3674

Subject(s) - economics , depreciation (economics) , inflation (cosmology) , exchange rate , monetary economics , government debt , government expenditure , government (linguistics) , latin americans , debt , government spending , deficit spending , macroeconomics , interest rate , public finance , market economy , linguistics , philosophy , physics , capital formation , financial capital , theoretical physics , welfare , human capital

Applying the autoregressive conditional heteroskedascity (ARCH) model as developed by Professor Robert F. Engle (1982, 2001) and based on a 1970-2002 sample, real GDP was found positively affected by the peso depreciation, the U.S. economy, real M2 money, government spending and the expected inflation rate, and negatively influenced by government debt. The gradual recovery of the U.S. economy is expected to help the Colombian economy. An increase in government spending helps raise real output, but increasing government debt to finance rising budget deficits would reduce national output.

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