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The Implementation of Inflation Targeting in Colombia

The Macroeconomics of Remittances in The Philippines

This article first explores the cyclical dynamics of remittances, and then, analyzes the macroeconomic impact of remittances and the monetary policy implications. In this endeavor, we use the case of the Philippines, one of the countries where remittances are substantial. A dynamic structural...

The macroprudential policy framework in Colombia

Macroprudential policy in Colombia is described along with a discussion of the main challenges faced by the authorities in implementing it and a review of episodes in which macroprudential measures were taken. An overview and some estimates of their effectiveness in preventing the buildup of...

The Monetary Policy Rule During The Transition To A Stable Level Of Inflation: The Case Of Colombia

During the transition from a moderately high level of inflation to an internationally accepted level, the target, the inflation rate, the nominal interest rate and the nominal equilibrium interest rate may be difference stationary. Policy rules estimation, however, is usually performed under...

The natural interest rate in Latin America America

 

The opinions contained in this document are the sole responsibility of the authors and do not commit Banco de la Republica or its Board of Directors.

 

 

The Price Setting Behavior in Colombia: Evidence from PPI Micro Data

In this paper we explore the price setting behavior of Colombian producers and importers using a unique database containing the monthly price reports underlying the Colombian PPI from Jun-1999 to Oct-2006. We focus on five particular questions: 1. Are prices sticky or flexible? 2. Is a price...

The Rise and Perpetuation of a Moderate Inflation, Colombia 1970-1991

Colombian inflationary experience is explained using a theoretical model that stresses two elements: the effect of shocks and the type of policy designed to respond to them. The empirical investigation uses the event-study methodology and finds that the model successfully accounts for the main...

The Stickiness of Colombian Consumer Prices

The price setting behavior of Colombian retailers of goods and services was studied based on a unique dataset containing 12,052,970 individual price reports covering all items in the Colombian CPI from March 1999 to May 2008. The main results are summarized as follows: 1. Colombian consumer...

The Stickiness of Colombian Consumer Prices

The price setting behavior of Colombian retailers of goods and services was studied based on a unique dataset containing 12,052,970 individual price reports covering all items in the Colombian CPI from March 1999 to May 2008. The main results are summarized as follows: 1. Colombian consumer...

The Use of Reserve Requirements in an Optimal Monetary Policy Framework

We analyse three models to determine the conditions under which reserve requirements are used as a part of an optimal monetary policy framework in an inflation targeting regime. In all cases the Central Bank (CB) minimizes an objective function that depends on deviations of inflation from its...

Too-connected-to-fail Institutions and Payments System’s Stability: Assessing Challenges for Financial Authorities

The most recent episode of market turmoil exposed the limitations resulting from the traditional focus on too-big-to-fail institutions within an increasingly systemic-crisis-prone financial system, and encouraged the appearance of the too-connected-to-fail (TCTF) concept. The TCTF concept...

Towards a Framework for Macroeconomic Analysis in an Emerging Market Economy

We develop a small open economy model with sectorial balance sheets that are exchange rate exposed and with sectorial stock and flow consistency. The model is perturbed by a shock to investor sentiment and a sudden stop to capital inflow. It is used to evaluate the claims that usually back the...

Transmission Mechanisms and Inflation Targeting: The Case of Colombia's Disinflation

Transmission mechanisms and inflation targeting: the case of Colombia’s desinflation

Transparency: can central banks commit to truthful communication?

To evaluate whether transparency is beneficial, it is usual to assume that the central bank may choose one of two options, opacity versus truthful communication. However, the monetary policymaker may have incentives to misrepresent private information so as to reduce economic volatility by...

Volatility Spillovers and Systemic Risk Across Economies: Evidence from a Global Semi-Structural Model

Abstract: The paper presents some evidence on the overwhelming relevance of systemic risk and the lesser importance of US interest rates in the global transmission of shocks. This evidence suggests that the literature could benefit from incorporating global confidence variables...

When Multiple Objectives Meet Multiple Instruments: Identifying Simultaneous Monetary Shocks

Central banks generally target multiple objectives while having at least the same number of monetary instruments. However, some instruments can be inadvertently collinear, leading to indeterminacy and identification failures. Paradoxically, most empirical studies have shied away from this...

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