This paper contributes to the study of the migratory phenomenon from Venezuela in Colombia by analyzing its effects and challenges in the adjustment of the economy. This article is divided into two modules. In the first one, we describe and characterize the migrant population in socio-economic and demographic terms and we explore their consumption and savings patterns. In the second module we study the implications of the migratory shock in three main spheres (i) the labor market, mainly we study the effects on the occupancy, participation, unemployment and formality rates (ii) the fiscal impact it represents to the nation and, lastly, (iii) its effect on the macroeconomic variables. In particular, we analyze the monetary policy response to the shock and the reaction of the Gross Domestic Product (GDP) gap and the Phillips curve in light of scenarios of increasing migrant flows.
This paper studies the credit cycle in Colombia during the period 2000-2017 and the main shocks that affected its supply. We also study the real effects of the different shocks. We use microdata from the credit registry, supersociedades and balance of payments. Our main findings are that the liquidity shock caused by the change in the weights of the public debt of Colombia in two index of JP Morgan, in March of 2014, explained 30% of the increase in firms’ average credit The main real effect of this shock was that from the total increase in the firms’ average investment 10% was explained by the shock. Second, we found that the liquidity shock originated in the global financial crisis of October 2008, with the bankruptcy of Lehman Brothers, reduced the credit supply to firms that had more reliance on credit by banks more exposed to the shock. Besides, this shock caused a fall in exports but the impact on agricultural exports was less that the one on total exports. Part of the explanation for this performance of agricultural exports is the credit policy of the government during 2006 and 2007 that favored firms with exporting potential with some subsidies. Another explanation for this performance was the boom in commodities prices. Third, the macroprudential policy shocks used to rein in the credit boom of 2006 – 2008 were effective in this sense. Particularly the capital controls policy, introduced in May 2007, reduced in about 50% the total debt flows of firms most exposed to the capital controls compared to the less exposed. The capital controls also caused a fall in imports. Finally, monetary policy shocks worked through the credit channel and the risk-taking channel of the monetary policy transmission mechanism. The main policy implication is that in a world with a high level of capital movements, it is necessary the combination of monetary and macroprudential policy in order to stabilize the economy.
We propose a chronology for the business cycles in Colombia following the NBER classic notion; that is, dates of peaks and troughs of economic activity are estimated without decomposing the series used in their transitory and permanent components. The estimated chronology suggests that the four complete cycles that occurred between 1975 and 2011 are asymmetric and have an approximate duration of 6.8 years. Expansions lasted, on average, 5.4 years while contractions took about 1.3 years. These results are derived from the application of a cumulative diffusion index to 41 series of economic activity.
Policy makers usually require estimates of the performance of economic activity in real time. However, the information used is only available at the level of hard indicators and opinion polls, which usually have different frequencies and publication lags, in addition to idiosyncratic shocks. In this paper, we adapt Camacho and Perez-Quiros (2009-2010) forecasting schemes that produce estimates of GDP growth in real time for the Colombian economy. The adapted dynamic factors model involves economic series of different frequency, availability and origin, used with the information available at the time of each publication. The forecast evaluation suggests that the model presents a better performance against other reference schemes, and that the accuracy of the forecasts increases when we include the flow of information in real time of the activity indicators.
This paper describes the construction of a new monthly leading indicator of economic activity in Colombia (IMACO). The procedure is based on a search algorithm that selects an optimal group of seven leading variables so that the composite indicator anticipates GDP movements five months in advance and with a 93 % correlation. Also, the IMACO has others desirables predictive properties: it anticipates the break points in the Colombian business cycle without giving any wrong signals, and minimizes the forecast errors on GDP growth. Due to its simplicity and low computational cost, the IMACO indicator offers a tool for the continuous monitoring of the economic activity and economic policy design, and can be replicated for other macroeconomic aggregates in Colombia and also applied in other Latin-American countries.