Macroeconomic Responses to Terms-Of-Trade Shocks

This paper presents a version of the global integrated monetary fiscal (GIMF) model adapted and calibrated to the Argentine economy. The model replicates the effect of the strong improvement in Argentina''s terms of trade stemming from higher world commodity prices as well as other key economic trends in Argentina during the period 2003-2007. The model can be used to assess the potential impact of different combinations of monetary and fiscal policies on output, inflation, and the external trade.Commodity prices;Economic models;External shocks;Price increases;Revenues;Terms of trade;inflation, monetary policy, inflationary pressures, nominal interest rates, exchange rate regime, tradable goods, domestic demand, intermediate goods, open economy, trade shock, real interest rate, terms of trade shock, real interest rates, output volatility, inflation targeting, foreign exchange, export taxes, world growth rate, terms of trade shocks, terms of trade effects, equilibrium model, trade effects, trade shocks, world growth, nominal interest rate, domestic economy, inflation target, terms-of-trade shocks, international trade, world economy, current account surplus, imported inputs, exchange rate regimes, domestic firms, distortionary taxes, exchange rate policy, external trade, foreign currency, investment goods