Stylized facts of the Peruvian economy

This article examines changes in the business cycles of the Peruvian economy in light of the impacts of structural reforms implemented in the early 1990s and the adoption of the inflation targeting regime in 2002. The study presents stylized facts regarding the evolution of macroeconomic variables between 1979 and 2005, showing that trade liberalization and the stability of fiscal and monetary policies have significantly reduced economic volatility and affected the correlations among different components of the cycle. Using the Baxter-King filter to extract cyclical components, it is observed that output volatility has decreased markedly, and that the procyclical behavior of variables such as consumption and public investment has been declining, while public spending has shown a weaker correlation with the economic cycle. The results suggest that greater economic integration with international markets and changes in the financing structure have altered cyclical dynamics, which has important implications for the calibration of economic policies in the country. (Abstract and audio: Department of Economic Publications)