Analyzing the Role of the Permanent and Temporary Shocks in Peru Using the Co-Movements Approach

In this study, we use the co-movements approach to examine role of permanent (common trend) and temporary cycle) shocks on per capita output, consumption, investment in Peru, a small open commodity-based economy. Using quarterly data from 1993: Q1 2019: Q1, effects are short-lived, and, average, minor source variations macro time series, over 10 quarters. This evidence suggests that main output consumption is common trend shock which must be related 1990s reforms. Moreover, less responsive unfavorable (favorable) cycle than is. outcome indicates has much more volatile private consistent with previous empirical work.