Volume 44, Number 174,
July-September 2013
Central America: The Urgency of Coherent
Commercial Diversification
Juan Sebastián Castillo, Esther Aguilera and Carmen García Cortijo
Defining the Simulation Model for International Commerce

With these results, the authors set out to create a scenario that would bring together the current circumstances of geographic diversification and a more diverse product portfolio. The proposed simulation model was as follows:

(19)

With:

(7)

Where Yit is gdp, μ and d are independent terms, IDP* is a random variable that represents a diversified market and was generated using a uniform probability distribution, conditioned at values above 0.18 (Herfindahl-Hirschman index limit) and uit is a zero mean random variable and has constant variance.

Defining the Intra-Regional Commerce Model

The final hypothesis (H4) regarding the intra-regional market was tested in the end, due to ongoing debate about whether international exports or intra-regional exports contribute most to influencing country revenue in Central America. The following model was proposed for this purpose:

(20)


With:

(7)

Where i is the i-th transverse unit (country), t is time (years), α1 are fixed transverse effects, (Y) is the gdp, (XINTRA) are exports among the five Central American countries, (XALC) are exports with the rest of Latin American nations and (XINTER) are global exports from Central American countries, discounted from the intra-regional exports and those destined for the rest of Latin America.

A fictitious term f was included, similar to the previous models, which accounts for the economic crisis. The variable uit is the error term that follows a zero mean and constant variance distribution.

The following paragraphs present the results for the models under study (expression 6, expression 16, expression 19 and expression 20).

Published in Mexico, 2012-2017 © D.R. Universidad Nacional Autónoma de México (UNAM).
PROBLEMAS DEL DESARROLLO. REVISTA LATINOAMERICANA DE ECONOMÍA, Volume 49, Number 192, January-March is a quarterly publication by the Universidad Nacional Autónoma de México, Ciudad Universitaria, Coyoacán, CP 04510, México, D.F. by Instituto de Investigaciones Económicas, Circuito Mario de la Cueva, Ciudad Universitaria, Coyoacán,
CP 04510, México, D.F. Tel (52 55) 56 23 01 05 and (52 55) 56 24 23 39, fax (52 55) 56 23 00 97, www.probdes.iiec.unam.mx, revprode@unam.mx. Journal Editor: Alicia Girón González. Reservation of rights to exclusive use of the title: 04-2012-070613560300-203, ISSN: pending. Person responsible for the latest update of this issue: Minerva García, Circuito Maestro Mario de la Cueva s/n, Ciudad Universitaria, Coyoacán, CP 04510, México D.F., latest update: Feb 23th, 2018.
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The online journal Problemas del Desarrollo. Revista Latinoamericana de Economía corresponds to the printed edition of the same title with ISSN 0301-7036