American consumer confidence and its effect through sovereign debt and high-interest rates in Colombia
This paper analyzes the Colombian aggregate economy and how it is affected by American Consumer Confidence. This study contributes to existing literature by demonstrating a non-linear relationship between American consumer confidence and Colombian macroeconomic variables such as GDP and investment....
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| Tipo de recurso: | tesis de maestría |
| Estado: | Versión aceptada para publicación |
| Fecha de publicación: | 2024 |
| País: | Colombia |
| Institución: | Universidad de los Andes |
| Repositorio: | Séneca: repositorio Uniandes |
| Idioma: | inglés |
| OAI Identifier: | oai:repositorio.uniandes.edu.co:1992/74285 |
| Acceso en línea: | https://hdl.handle.net/1992/74285 |
| Access Level: | acceso abierto |
| Palabra clave: | Consumer confidence Interest rates Emerging markets Colombia Animal spirits Economía |
| Sumario: | This paper analyzes the Colombian aggregate economy and how it is affected by American Consumer Confidence. This study contributes to existing literature by demonstrating a non-linear relationship between American consumer confidence and Colombian macroeconomic variables such as GDP and investment. I hypothesize the mechanism through which this effect operates is interest rates: Using a dynamic stochastic general equilibrium model (DSGE), based on the real business cycle (RBC), I internalize exogenous shocks to consumer confidence in the United States to the Colombian economy and evidence its effect on the Colombian economy through the interest rate; thereby offering new insights into the complex dynamics between emerging markets and developed economies. The analysis reveals that the effect of American consumer confidence on Colombian interest rates follows a quadratic pattern, where both negative shocks and large positive shocks to confidence induce higher interest rates within the Colombian financial context. |
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