Date of Award


Document Type

Honors Thesis (Colby Access Only)


Colby College. Economics Dept.


Michael R. Donihue


Econometric Modeling has a wide range if applications, including economy-wide representations. This study takes on the task of finding a suitable structure to model the Venezuelan economy. It is revealed that econometric structural and computable general equilibrium models are inapplicable, given data and national circumstances. In turn, a vector autoregressive model is applied to portray GDP, exports, and investments. Apart from the autoregressive component oil prices are included in all the equations of the model to enable the economic and policy analysis. Furthermore, the model is used to illustrate how the boom of oil prices between 1999 and 2000, affected these sectors. As a result is it attained that higher oil prices have an adverse effect on GDP, exports, and investment which conflicts with the actual belief that higher a price is beneficial. These empirical results caused surprise and conflict, since it differed from any anticipated outcomes.


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Econometric Modeling, Venezuela, oil prices, effects