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AbstractIn this paper, we examine the financial and real effects of macroprudential policies with a new identifying strategy that exploits borrower-specific provisioning levels for each bank. Locally, we compare similar firms just below and above regulatory thresholds established in Colombia during…

AbstractWe provide the first comprehensive analysis of the flow-performance relation in Colombian open-end investment funds. We employ a rich dataset containing weekly information at the fund level, including balance sheets, portfolio holdings, liquidity indicators, capital flows, and returns, from…

XGBoost models are more accurate in forecasting food inflation than linear models for most of the 33 baskets studied, especially for longer forecast horizons.

When we observe an increase in labor formality associated with a higher level of economic development, is it because more people gain access to the formal sector, or because those already working remain longer in formal jobs? This study shows that labor formality rises with the level of development…

Evidence shows that the transmission of global shocks to domestic financial conditions was significantly stronger during the period of high foreign participation (2014–2022) and weakened after 2023 as foreign holdings declined. 

Market frictions and banking regulations limit the liquidity of the derivatives market, particularly affecting large firms. Foreign exchange interventions have asymmetric effects: they implicitly protect small firms under low intervention scenarios, but benefit large firms when intervention is high.

Increases in current income generate marginal propensities to consume that are about 25% higher than those associated with income declines, while reductions in interest rates induce long‑run responses nearly 188% larger than increases. These patterns are consistent with the presence of liquidity…

Labor informality, through its interaction with wage rigidities, productivity differences, and household financial constraints, acts as a powerful amplifier of macroeconomic volatility in consumption and investment, despite its traditional role as an employment stabilizer in emerging economies.

ApproachColombia is undergoing a demographic transformation characterized by a marked decline in fertility rates and a sustained increase in life expectancy. Within a few decades, the country has shifted from having a predominantly young population to facing a rapid ageing process. This transition…

Reducing the discrimination-based pay gap by 50% is associated with a potential 8% increase in Colombia's GDP in the long run. These results depend on the substitutability between men and women in the labor market and can be smaller if closing the pay gap implies a policy effort that must be…

Increases in commodity prices are partially passed through to final processed food prices. A 1% increase in commodity prices raises producer prices by 0.6% and consumer prices by 0.3%.

Cross-subsidization is not merely a redistributive strategy, but a central mechanism that favors demand and generates substantial gains for both consumers and retailers, and regulations that restrict this mechanism may have unintended effects on welfare.

AbstractWe present evidence of the minimum wage effects on labour informality rates in Colombia, where the informality is by far the most serious problem of the labour market. The working population is divided into sixteen groups depending on the age, gender, and educational level. This division…

The results show  considerable heterogeneity in the adoption and use of payment methods and reveal that mobile wallets broaden the range of options available to users. 

An unexpected increase in the monetary policy rate generates a “Jcurve” pattern in the trade balance: in the short run, exports fall more than imports (the trade balance deteriorates), and in the medium term, imports fall more than exports (the trade balance improves). 

Regarding the impact of monetary policy on housing prices, we find that it is significant: a one-unit monetary policy surprise shock (in the index) leads to a decline in housing price growth of approximately 6 percentage points as supply elasticity decreases.

The Housing Market Conditions Indicator (HMCI) provides a comprehensive and timely measure for monitoring developments in Colombia’s housing market and for complementing the analysis of the country’s economic cycle. 

Although there is a close relationship between the government’s budget and its fiscal balance, they respond to different objectives, concepts, accounting bases, and measurement methodologies, which makes their understanding, monitoring, and evaluation more difficult. 

The combination of economic theory and neural networks makes it possible to capture complex relationships and enhance the understanding of real exchange rate misalignment in Colombia.

The results show a significant increase in formal employment among eligible firms, ranging from 11 to 18 percentage points compared to non-beneficiaries. This impact persisted for up to two years after the program ended. 

Hospital productivity has declined steadily across all three complexity levels. Level 3 public hospitals (ESEs) were more resilient during the pandemic, while Level 2 hospitals suffered the greatest impact but showed a stronger recovery. Level 1 hospitals experienced the most prolonged decline with…

Economic news contains qualitative and forward-looking information that traditional data cannot capture. The sentiment and uncertainty indices synthesize this information and translate it into useful signals to enhance the analysis of short-term dynamics and turning points in economic activity. 

In contexts of sustained depreciation, firms face a trade-off between investing and engaging in financial hedging, suggesting the need for policies that improve the liquidity and accessibility of the derivatives market to reduce these costs and foster investment.

Neighborhoods that initially had high crime rates, and that were connected to the cable cars experience a significant decrease in the likelihood that their residents engage in criminal activities, and this change is proportional to the reductions in travel time provided by the new infrastructure. 

The implicit equity tax is progressive for smaller firms but regressive for larger ones.