Macroeconomic Effects of Oil Price Fluctuations in Colombia
This research aims to study the effects of oil price changes on the Colombian economy during 2001:Q1 to 2016:Q2. A structural vector auto-regression model in the spirit of Blanchard and Galí (2010) is estimated under a recursive identification scheme, where unexpected oil price variations are exogen...
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| Format: | Article |
| Language: | English |
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Universidad EAFIT
2016-12-01
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| Series: | Ecos de Economía |
| Online Access: | http://publicaciones.eafit.edu.co/index.php/ecos-economia/article/view/4181/pdf |
| Summary: | This research aims to study the effects of oil price changes on the Colombian economy during 2001:Q1 to 2016:Q2. A structural vector auto-regression model in the spirit of Blanchard and Galí (2010) is estimated under a recursive identification scheme, where unexpected oil price variations are exogenous relative to the contemporaneous values of the remaining variables. Drawing on impulse-response estimates, a 10% increase in the oil price generates the following accumulated orthogonalized responses: i) a contemporaneous 0.4% increase in GDP growth, later on the effect reaches its maximum in the first quarter (1.7% increase) and starts to decay after two quarters; ii) a contemporaneous 1.2% decrease in unemployment, then the effect remains slightly negative and reaches its maximum after ten quarters (5.1% decrease); iii) a contemporaneous 0.9% decrease in inflation, followed by an 0.2% increase by quarter three, and thereafter the effect remains slightly negative.
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| ISSN: | 1657-4206 1657-4206 |