Resumen

This paper analyzes the Colombian aggregate economy and how it is affected by American Consumer Confidence. This study contributes to existing literature by demonstrating a non-linear relationship between American consumer confidence and Colombian macroeconomic variables such as GDP and investment. I hypothesize the mechanism through which this effect operates is interest rates: Using a dynamic stochastic general equilibrium model (DSGE), based on the real business cycle (RBC), I internalize exogenous shocks to consumer confidence in the United States to the Colombian economy and evidence its effect on the Colombian economy through the interest rate; thereby offering new insights into the complex dynamics between emerging markets and developed economies. The analysis reveals that the effect of American consumer confidence on Colombian interest rates follows a quadratic pattern, where both negative shocks and large positive shocks to confidence induce higher interest rates within the Colombian financial context.