International shocks and the Colombian economy: A Global VAR Approach

The influence of the international business cycle has grown larger during the past two decades, forcing worldwide policymakers to include the state of the world economy in their decision-making process. Colombia is far from being an exception, thus requires accurate measurements of the effects that some foreseeable shifts in the international dynamics could have over the local economic variables. This document attempts to provide such measurements trough the use of a Global VAR. It is found that the Colombian economy has grown more sensible to the international business cycle due to its increasing openness and its deepening association with the economies driving world growth.