Incidence of remuneration to capital on the colombian business cycle from 1980 to 2005

Abstract

The business cycle was one of the most important issues in the economic agendafrom the late 19th Century to the mid 20th Century. The importance of the studylay in the priority of finding the causes and duration of economic crisis, and tobe able to determine or predict how often they would happen. Currently, and with the recent financial crisis in the United States (2008) and in Colombia(1998-2009), among others, this study has gained importance once more. Thispaper presents a number of points of view on the matter and focuses on an approach that has been given very little consideration: Michal Kalecki’s theory,which provides a basis for analyzing the Colombian business cycle from 1980to 2005, and thus compare the model estimated through the Three-Stage LeastSquares (3SLS) method with the behavior of the remuneration to capital during the same period. Based on this, a close relation is found between the latter, the decision to invest and, therefore, the declining phase of the business cycle.