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

Valencia

Seminario; XII Arnolshain Seminar; 2014

Universidad de Valencia y Universidad Jaume I

We mean to improve upon a standing ambiguity in the meaning of ?volatility?, building indicators that possess desirable properties: they reflect unobserved ex ante uncertainty, make reference to a time process, and use the admissible data set for the economicagent. 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.