DETERMINANTS OF THE PRIMARY AND MANUFACTURING SHARES IN GDP AND THE REAL EXCHANGE RATE IN ARGENTINA

Posadas

Congreso; XLIX Reunión Anual de la AAEP (Asociacion Argentina de Economia Politica); 2014

Universidad Nacional de Misiones

This paper focuses on the real exchange rate and the sectoral shares. In Argentina, real exchange rate appreciations are caused by productivity improvements in the primary and manufacturing sectors, while real depreciations are generated by additional government spending, terms of trade and debt services. The size of the primary sector increases due to productivity improvements in that sector and additional government spending. Improvements in the terms of trade and the primary and manufacturing sectors productivity and additional government spending diminish the size of the manufacturing sector. The real exchange depreciated by about 37% with an 21% overshooting at the end of 2001.