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

Posadas

Congreso; XLIX Reunión Anual de la Asociación Argentina de Economía Política; 2014

Asociación Argentina de Economía Política

We mean to improve upon a standing ambiguity in the meaning of ?volatility?, building an indicator that possesses desirable properties: it reflects unobserved ex ante uncertainty, makes reference to a time process, and uses the admissible data set for the economic agent. We point out the characteristics of old and new approaches, and estimate TOT volatility evolutions for selected land-abundant countries using our own forward-looking estimation based on forecasting errors. We argue that this estimation is free from methodological weaknesses of other methods. A check on the robustness of methods shows that different definitions provide non-coincident patterns of volatility.