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Too late but profitable: Railroads in Colombia during 1920–1950

Author

Listed:
  • Adolfo Meisel-Roca

    (Banco de la República, Carrera 7 # 14-78 Piso 6, Bogotá, Colombia)

  • María Teresa Ramírez-Giraldo

    (Banco de la República, Carrera 7 # 14-78 Piso 11, Bogotá, Colombia)

  • Juliana Jaramillo-Echeverri

    (Banco de la República, Carrera 7 # 14-78 Piso 6, Bogotá, Colombia)

Abstract

During the 1920s, the Colombian economy experienced the highest growth rate in its history. The economic reforms of 1923 (central bank, gold standard, banking legislation, fiscal reorganization), a coffee boom, and an unprecedented influx of foreign capital were the driving forces behind this success. The loans obtained by 1929 amounted to 257 million dollars. Those funds were used mainly to build much needed infrastructure, particularly railroads. In this paper, we estimate the rates of return of the investments made in Colombian railroads during the period 1924–1950. We consider that Colombia ended up paying only around 85% of the loans obtained in the 1920s, owing to the suspension of foreign debt payments; as a result, the profitability in the construction of railways was higher. The rates of return on the railroads constructed and extended in the 1920s are comparable to those obtained for European countries in the nineteenth century. KEY Classification-JEL: N26. N76. O16. O18

Suggested Citation

  • Adolfo Meisel-Roca & María Teresa Ramírez-Giraldo & Juliana Jaramillo-Echeverri, 2016. "Too late but profitable: Railroads in Colombia during 1920–1950," Investigaciones de Historia Económica - Economic History Research (IHE-EHR), Journal of the Spanish Economic History Association, Asociación Española de Historia Económica, vol. 12(03), pages 165-180.
    • Handle: RePEc:ahe:invest:v:12:y:2016:i:03:p:165-180
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    References listed on IDEAS

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    1. Juan José Echavarría, 1982. "La deuda externa colombiana durante los 20s y los 30s. Algunas ensenanzas para el presente," Coyuntura Económica, Fedesarrollo, vol. 12(2), pages 85-119, July.
    2. Francisco José Ortega-Acosta & Adolfo Meisel-Roca & Jorge Enrique Ibánez-Nájar & Alejandro López-Mejía & Hernando José Gómez-Restrepo, 2023. "Banco de la República: antecedentes, evolución y estructura," Books, Banco de la Republica de Colombia, number 2023-isbn:9789586644488 edited by Mario Lombo-Vanegas & Rafael Isaza-Botero & Adolfo Meisel-Roca & Alejandro López-Mejía.
    3. Roberto Junguito & Hernán Rincón, 2004. "La Política Fiscal En El Siglo Xx En Colombia," Borradores de Economia 3052, Banco de la Republica.
    4. Summerhill, William R., 1996. "Railroads and the Brazilian Economy Before 1914," The Journal of Economic History, Cambridge University Press, vol. 56(2), pages 464-467, June.
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    Cited by:

    1. Maria Paula Saffon & Fabio Sánchez, 2019. "Historical grievances and war dynamics: Old land conflicts as a cause of current forced displacements in Colombia," Documentos CEDE 17320, Universidad de los Andes, Facultad de Economía, CEDE.
    2. Gerardo della Paolera & Xavier H. Duran Amorocho & Aldo Musacchio, 2018. "The Industrialization of South America Revisited: Evidence from Argentina, Brazil, Chile and Colombia, 1890-2010," NBER Working Papers 24345, National Bureau of Economic Research, Inc.
    3. Lucas Wilfried Hahn-De-Castro & Adolfo Meisel-Roca, 2018. "La desigualdad económica entre las regiones de Colombia, 1926-2016," Cuadernos de Historia Económica 16428, Banco de la República, Economía Regional.
    4. Ana María Iregui-Bohórquez & Ligia Alba Melo-Becerra & María Teresa Ramírez-Giraldo & Ana María Tribín-Uribe, 2020. "The path to gender equality in Colombia: Are we there yet?," Borradores de Economia 1131, Banco de la Republica de Colombia.

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    More about this item

    Keywords

    Railroads. Rate of return. Investment. Foreign debt;

    JEL classification:

    • N26 - Economic History - - Financial Markets and Institutions - - - Latin America; Caribbean
    • N76 - Economic History - - Economic History: Transport, International and Domestic Trade, Energy, and Other Services - - - Latin America; Caribbean
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure

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