Indirect impacts of oil prices on economic growth in Colombia

Sergio González () and Edwin Hernández ()
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Sergio González: Universidad Nacional de Colombia
Edwin Hernández: Universidad Nacional de Colombia

Lecturas de Economía, 2016, issue 84, 103-141

Abstract: In this paper, we study the relationship between oil prices and macroeconomic variables such as gross domestic product (GDP), real exchange rate, fiscal balance, among others, in Colombia during two time periods: 1982-2013 and 2000-2013. We use vector autoregressive models to analyze impulse-response functions; also, we use transformations of oil prices allowing contrast of different hypotheses on the transmission of price shocks to the economy. Further, we contrast Colombian and international evidence regarding the hypothesis that the main channel of transmission of oil price shocks is private consumption. We find evidence of a relationship between consumption and GDP for both time periods. Particularly in the period 2000-2013, when the oil sector has gained participation in the Colombian economy, it is found that private consumption serves as an indirect transmission channel of oil prices into GDP.

Keywords: oil prices; indirect impacts; impulse-response functions (search for similar items in EconPapers)
JEL-codes: C32 E17 Q41 Q43 (search for similar items in EconPapers)
Date: 2016
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Persistent link: https://EconPapers.repec.org/RePEc:lde:journl:y:2016:i:84:p:103-141

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DOI: 10.17533/udea.le.n84a04

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