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Depressions in the Colombian economic growth during the twentieth century: a Markov switching regime model

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  • Martha Misas
  • Maria Teresa Ramirez

Abstract

In this article, we modelled the Colombian long run economic growth (1925-2003) using a two-regime first order Markov switching model. We found evidence of nonlinearity in the annual rate of economic growth. The results show that changes between regimes are sudden and sporadic. The Colombian economy remains in the sustainable growth regime most of the time. The turning points from the Markov switching model capture very well the behaviour of real output through time. In fact, they identify the four main depressions of the century.

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  • Martha Misas & Maria Teresa Ramirez, 2007. "Depressions in the Colombian economic growth during the twentieth century: a Markov switching regime model," Applied Economics Letters, Taylor & Francis Journals, vol. 14(11), pages 803-808.
    • Handle: RePEc:taf:apeclt:v:14:y:2007:i:11:p:803-808
    DOI: 10.1080/13504850600689881
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    3. Luciano Campos & Danilo Leiva-León & Steven Zapata- Álvarez, 2022. "Latin American Falls, Rebounds and Tail Risks," Borradores de Economia 1201, Banco de la Republica de Colombia.
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    5. Oscar V. De la Torre-Torres & Dora Aguilasocho-Montoya & María de la Cruz del Río-Rama, 2020. "A Two-Regime Markov-Switching GARCH Active Trading Algorithm for Coffee, Cocoa, and Sugar Futures," Mathematics, MDPI, vol. 8(6), pages 1-19, June.
    6. Oscar V. De la Torre-Torres & Evaristo Galeana-Figueroa & José Álvarez-García, 2019. "A Test of Using Markov-Switching GARCH Models in Oil and Natural Gas Trading," Energies, MDPI, vol. 13(1), pages 1-24, December.

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