Modeling construction cycle in Colombia by system dynamics

Abstract

The objective of this investigation is to propose a model using dynamic systems about determinants of the construction sector in Colombia assuming that such behavior is cyclical. The indicators used to track the cyclical behavior includes: interest rate for housing loans, number of building permits requested, number of houses built and number of credits approved by the banking system, among others. From these data and statistical analysis, the housing deficit and the growth in the share of construction activity in the gross domestic product (gdp) of Colombia is quantified.