The purpose of this article is to study
the cyclical interdependence of the
GDP in the state of Cauca with its
neighboring states. A review was
conducted of the regional economic
cycles using Kalman and Hodrick-
Prescott’s filters. This included the
use of VAR systems with impulse
response analysis to determine the
impact of the economic cycle in the
State of Cauca and exogenous shocks
on the region and vice versa. Firstly,
our results show that the cycle in the
state of Cauca has a closer relation
to the cycle in the state of Nariño as
opposed to the cycles in the states
of Huila, Valle, or Tolima. It also
reveals that exogenous shocks have
greater volatility using a Kalman
filter than using a Hodrick-Prescott
filter.
