Mining and Energy Boom, Dutch Disease and Informality in Colombia: a DSGE Approach

The paper develops a Dynamic Stochastic General Equilibrium (DSGE) model, which assesses the macroeconomic and labor market effects derived from simulating a positive shock to the stochastic component of the mining-energy sector productivity. Calibrating the model for the Colombian economy, this shock generates a whole increase in formal wages and a raise in tax revenues, expanding total consumption of the household members. These facts increase non-tradable goods prices relative to tradable goods prices, then real exchange rate decreases (appreciation) and occurs a displacement of productive resources from the tradable (manufacturing) sector to the non-tradable sector, followed by an increase in formal GDP and formal job gains. This situation makes the formal sector to absorb workers from the informal sector through the non-tradable formal subsector, which causes informal GDP to go down. As a consequence, in the net consumption falls for informal workers, which leads some members of the household not to offer their labor force in the informal sector but instead they prefer to keep unemployed. Therefore, the final result on the labor market is a decrease in the number of informal workers, of which a part are in the formal sector and the rest are unemployed.

A new form of land concentration in Colombia

This article aims to show how the Law 1448 of 2011, which explains reparation and restitution of victims, and the National Development Plan (NDP) 2011-2014 generate land concentration in Colombia -- This is due to how the NDP objectives disintegrate the Law 1448 objectives; this phenomenon could be explained using an agency model and the subsequent moral risk issue formed between the State and the victims -- Regarding these results, a game-theory model was built, and this effectively concludes that the Law 1448 and the NDP generate land concentration in Colombia

An evaluation of the transmission of the policy interest rate to the financial system’s interest rates in Colombia

This paper studies monetary policy transmission using several statistical tools -- We find that the relationships between the policy interest rate and the financial system’s interest rates are positive and statistically significant, and transmission is complete eight months after policy shocks occur -- The speed of transmission varies according to the type of interest rates -- Transmission is faster for interest rates on loans provided to households, and is particularly rapid and complete for rates on preferential commercial loans -- Transmission is slower for credit card and mortgage rates, due to regulatory issues (interest rate ceilings)

For love or for money? A study of the marriage wage premium in Colombia

Being married may raise worker productivity and increase the probability of remaining in a job and, as consequence, obtaining a wage premium -- Yet, this effect may be different for males and females -- In developing countries, such as Colombia, the premium may be larger than in developed countries due to the differing social norms and labor market structures -- Using cross-sectional data from Colombian Household Surveys, this paper examines the marriage wage premium and its evolution in Colombia both at the aggregate level and by gender -- We find a marriage wage premium for both male and female populations; this wage premium is explained by the greater human capital endowment in married people and to employer favoritism due to the “social norms” which consider being married an appropriate behavior and reward it

Exchange rate dynamics, structural breaks, and central bank interventions in Colombia

We evaluate the effectiveness of the Colombian Central Bank´s interventions in the foreign exchange market during the period 2000 to 2014 -- We examine the stochastic process that describes the exchange rate, with a focus on the detection of structural breaks or unit roots in the data to determine whether the Central Bank´s interventions were effective -- We find that the exchange rate can be described either by a random walk or by a trend-stationary model with multiple breaks -- In neither cases do we find any evidence that the exchange rate was affected by the Central Bank interventions

Malaria in gold-mining areas in Colombia

Gold-mining may play an important role in the maintenance of malaria worldwide. Gold-mining, mostly illegal, has significantly expanded in Colombia during the last decade in areas with limited health care and disease prevention. We report a descriptive study that was carried out to determine the malaria prevalence in gold-mining areas of Colombia, using data from the public health surveillance system (National Health Institute) during the period 2010- 2013. Gold-mining was more prevalent in the departments of Antioquia, Córdoba, Bolívar, Chocó, Nariño, Cauca, and Valle, which contributed 89.3% (270,753 cases) of the national malaria incidence from 2010-2013 and 31.6% of malaria cases were from mining areas. Mining regions, such as El Bagre, Zaragoza, and Segovia, in Antioquia, Puerto Libertador and Montelíbano, in Córdoba, and Buenaventura, in Valle del Cauca, were the most endemic areas. The annual parasite index (API) correlated with gold production (R2 0.82, p < 0.0001); for every 100 kg of gold produced, the API increased by 0.54 cases per 1,000 inhabitants. Lack of malaria control activities, together with high migration and proliferation of mosquito breeding sites, contribute to malaria in gold-mining regions. Specific control activities must be introduced to control this significant source of malaria in Colombia.

Detection of all four dengue serotypes in Aedes aegypti female mosquitoes collected in a rural area in Colombia

The Aedes aegypti vector for dengue virus (DENV) has been reported in urban and periurban areas. The information about DENV circulation in mosquitoes in Colombian rural areas is limited, so we aimed to evaluate the presence of DENV in Ae. aegypti females caught in rural locations of two Colombian municipalities, Anapoima and La Mesa. Mosquitoes from 497 rural households in 44 different rural settlements were collected. Pools of about 20 Ae. aegypti females were processed for DENV serotype detection. DENV in mosquitoes was detected in 74% of the analysed settlements with a pool positivity rate of 62%. The estimated individual mosquito infection rate was 4.12% and the minimum infection rate was 33.3/1,000 mosquitoes. All four serotypes were detected; the most frequent being DENV-2 (50%) and DENV-1 (35%). Two-three serotypes were detected simultaneously in separate pools. This is the first report on the co-occurrence of natural DENV infection of mosquitoes in Colombian rural areas. The findings are important for understanding dengue transmission and planning control strategies. A potential latent virus reservoir in rural areas could spill over to urban areas during population movements. Detecting DENV in wild-caught adult mosquitoes should be included in the development of dengue epidemic forecasting models.

Estimating dynamic models with aggregate shocks and an application to mortgage default in Colombia

We estimate a dynamic model of mortgage default for a cohort of Colombian debtors between 1997 and 2004. We use the estimated model to study the effects on default of a class of policies that affected the evolution of mortgage balances in Colombia during the 1990's. We propose a framework for estimating dynamic behavioral models accounting for the presence of unobserved state variables that are correlated across individuals and across time periods. We extend the standard literature on the structural estimation of dynamic models by incorporating an unobserved common correlated shock that affects all individuals' static payoffs and the dynamic continuation payoffs associated with different decisions. Given a standard parametric specification the dynamic problem, we show that the aggregate shocks are identified from the variation in the observed aggregate behavior. The shocks and their transition are separately identified, provided there is enough cross-sectionavl ariation of the observeds tates.