Standard vs. expectation-based indices of TOT volatility in Argentina and other land-abundant countries.

Valencia

Congreso; Arnoldshain Seminar XII; 2014

A long standing ambiguity in the meaning of "volatility" in economics conflicts with scientific rules. A discussion of old and new use of volatility and uncertainty highlights the diverse approaches, definitions and indicators of volatility. To build a volatility time series we examine alternative empirical methodologies, discuss the criticism to them, and provide annual estimations of TOT and GDP volatility evolutions for selected landabundant countries. We checked the robustness of empirical findings and found that different definitions of volatility provide non-coincident stylized facts. Further, we offer aforward-looking estimation of volatility based on forecasting errors, and argue that they provide an estimation of volatility that is free from the methodological weaknesses of the other methods.