Abstract

VERGARA GONZALEZ, Reyna; MEJIA REYES, Pablo  and  DIAZ CARRENO, Miguel Ángel. Business Cycles and Monetary and Financial Variables in Mexico, 1980-2019: A Structural Change Approach. Ens. Rev. econ. [online]. 2021, vol.40, n.2, pp.137-158.  Epub Feb 21, 2022. ISSN 2448-8402.  https://doi.org/10.29105/ensayos40.2-2.

This paper aims to analyze the relationship between the business cycle and various monetary and financial variables. In particular, the paper seeks to determine whether this relationship has been stable over time, considering the effects of the changes in the general economic conditions, the specific monetary policy strategy adopted in different subperiods, and the institutional framework in which this is managed. To test the stability of these relationships, once the cycle indicators are obtained using conventional filters, the structural change methodology of Bai and Perron (1998) is used. The results highlight two structural changes in the relationship between the cycle indicator and inflation, interest rate, nominal exchange rate, and nominal monetary aggregates, one in the mid-eighties and the other in the middle of the nineties.

Keywords : Business cycles; Structural changes; Monetary policy.

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