Desaceleración económica e inflación de activos financieros en Colombia

Abstract

This paper analyses the impact the inflation of financial assets (stocks, housing and credit) have on the probability of economic slowdown in Colombia for the period 1990-2011 by using binary models Logit and Probit. The term (short or medium) with which each financial variable affects the real sector of the economy is determined and an interpretation of the effect that predominates in each variable as it impacts the probability of economic slowdown is made. The results show that increases in the growth of credit positively affect the economy in the short term and reduce the probability of economic slowdown through a wealth effect. Increases in housing prices have a wealth effect in the short term but in the medium term they have an asset overvaluation effect. The mortgage overvaluation can generate bubbles in the housing prices and slowdown the economy in the medium term. It is evidenced that the housing variable is an adequate early warning indicator to the economic cycles in Colombia.