FACULTAD DE CIENCIAS ECONÓMICAS Y EMPRESARIALES

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Abstract

This econometric study consist in an analysis of the volatility of growth of the gross 
domestic product (GDP) in the Latin American countries that uses inflation targeting 
as monetary policy, generally the GPD’s volatility it’s associated with the economy 
stability, because it allows the agents to make decisions using historical data, in order 
to reduce their uncertainty, so they could anchor their expectations on future events. 
The sample consists of eight countries in the region that have different degrees of 
openness in their exchange rate policies, additionally it was used the commercial 
openness, the volatility of the exchange rate, the consumer price index, the gross 
capital formation, and the M2 as proportion of the GDP.

The results indicate that the volatility of the growth of the GDP it’s explained by the 
inflation’s volatility, this is consistent with the monetary policy of inflation targeting.

Keywords: economic growth, volatility, Latin America