Oil Prices and the Economic Cycle in a dollarized economy:

This research has the objective of analyzing the growth of the Ecuadorian economy in the long run and the existing relationship of the price variations of raw materials, specifically oil, in the economic cycle of a dollarized economy like the Ecuadorian one. The research is based on a Markov model of regime changes, which allows to establish states for the economic cycle and the transitions that it can have in the face of oil price shocks. The research was conducted for the period 1991:01-2019:04. The results obtained show evidence that variations in the oil price are related to changes in the state of the business cycle in a dollarized economy, such as the Ecuadorian one.