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External Linkages and Economic Growth in Colombia :, Insights from A Bayesian VAR Model, Pär Österholm, Lisandro Abrego

This paper investigates the sensitivity of Colombian GDP growth to the surroundingmacroeconomic environment. We estimate a Bayesian VAR model with informative steady-statepriors for the Colombian economy using quarterly data from 1995 to 2007. A variancedecomposition shows that world GDP growth and government spending are the most importantfactors, explaining roughly 17 and 16 percent of the variance in Colombian GDP growthrespectively. The model, which is shown to forecast well out-of-sample, can also be used toanalyse alternative scenarios. Generating both endogenous and conditional forecasts, we showthat the impact on Colombian GDP growth of a substantial downturn in world GDP growthwould be non-negligible but still a mild decline by historical standards
Table Of Contents
Contents; I. Introduction; II. The Model; III. Empirical Implementation; Figures; 1. Data; IV. Results; A. Impulse Responses and Variance Decomposition; Tables; 1. 95 Percent Prior Intervals; 2. Impulse Response Functions for Colombia GDP Growth; B. Historical Decomposition; 3. Variance Decomposition for Colombia GDP Growth; 4. Foreign and Domestic Factors in 2004-07 Growth; C. Out-of-Sample Forecasting: A Comparison; D. Unconditional and Conditional Forecasts; 5. Forecasting Performance of Alternative Models (Relative Mean Square Errors); 6. Unconditional Forecast
Literary Form
non fiction
Description based upon print version of record
Physical Description
1 online resource (26 p.)
Specific Material Designation
Form Of Item

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