This paper studied the extent and the features of the transmission of US shocks to Mexico,
Panama, Ecuador, Argentina, Uruguay, Peru, Brazil and Chile. I identify US structural shocks
using the two-step procedure of Canova and De Nicol´o (2002), which first extracts orthogonal
innovations from reduced form residuals and then studies whether their informational content is
consistent with the restrictions imposed by a large class of theoretical dynamic models. Then I
feed these statistical shocks into VAR models for each Latin American economy, study the pattern
of propagation, measure their contribution to the variability of domestic variables, and describe
conditional co movements in the continent using posterior estimators which efficiently combine
cross-sectional information.