Macroeconomic Effects of Oil Price Fluctuations in Colombia

Leonardo Quero-Virla ()

Revista Ecos de Economía, 2016, vol. 20, issue 43, 23-38

Abstract: 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.

Keywords: SVAR; impulse-response; oil market; Colombia (search for similar items in EconPapers)
JEL-codes: C50 E20 E30 Q43 (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:col:000442:015651

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