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This paper investigates the sensitivity of Colombian GDP growth to the surrounding macroeconomic environment. We estimate a Bayesian VAR model with informative steady-state priors for the Colombian economy using quarterly data from 1995 to 2007. A variance decomposition shows that world GDP growth and government spending are the most important factors, explaining roughly 17 and 16 per cent of the variance in Colombian GDP growth respectively. The model, which is shown to forecast well out-of-sample, can also be used to analyse alternative scenarios. Generating both endogenous and conditional forecasts, we show that the impact on Colombian GDP growth of a substantial downturn in world GDP growth would be non-negligible but that the decline still would be mild by historical standards. [ABSTRACT FROM AUTHOR]

Previous literature on labour migration has paid little attention to the influence of environmental attributes. This paper attempts to remedy this void by developing a simple, two-region general equilibrium model with amenities playing a key role in affecting migration flows. Specifically, we argue that in the presence of an environmental externality, interregional labour migration depends not only on wages but also on amenities. People may leave a region offering higher wages, if the resulting utility loss from worsened amenities exceeds the gain in wages. Policies should be adopted by regions or nations to regulate the environment to provide for the quality of living. To attain this goal, regional or international policy cooperation on tradable pollution permits can be superior to pollution permits supplied independently by each region or nation while non-tradable between them. [ABSTRACT FROM AUTHOR]

We analyse the dynamics of financial development and economic growth in the Euro area as these countries went through considerably higher levels of financial development. Using a balanced panel data of 38 years from 1980 to 2018, we offer new evidence on the finance–growth nexus. We show the presence of non‐linearity as there is an inverted U‐shaped relationship between finance and growth in the long run. Estimating the thresholds in the finance–growth nexus, we notice a threshold effect at 74%–86% of GDP for domestic credit; 51% of GDP for stock turnover ratio; and 65% of GDP for stock market capitalisation. We notice that exceeding the threshold causes deceleration in economic growth as too much finance results in crowding out effect for productive economic activities. The panel Granger causality test results show that financial development should be associated with optimal growth performance. These findings in the Euro area provide some useful policy implications to the emerging and developing economies in designing their financial development strategies. [ABSTRACT FROM AUTHOR]