Arnoldshain Seminar XV
“The EU and Latin America Facing Globalization”
September 4 – 6, 2017

Bucacos, Elizabeth, Banco Central Uruguay, Financial conditions and monetary policy in Uruguay: an MS-VAR approach.
This study analyzes the effects of “financial stress” on the Uruguayan macroeconomy in the 1998Q3-2016Q2 period with the underlying idea that financial shocks propagate differently during “normal times” than during “stress”. This behavior is captured in a multivariate framework through a Markov-switching vector autoregressive (MS-VAR) model. The evidence found so far supports the idea that financial conditions affect the macroeconomy for not only there are different private investment long-run average growth rates but also the behavior of monetary policy changes directly.