Publications

Through its benchmark interest rate, Banco de la República is able to influence the behavior of the Colombian economy, and that of variables such as inflation, GDP growth, among others. A significant portion of the impact of monetary policy depends on the distance between the…

Macroprudential tools have been used around the world as a mechanism to control potential risks and imbalances in the financial sector. Colombia is a good example of a country that has employed different regulatory measures to manage systemic risks in the economy. The purpose of this paper is to…

This paper estimates the local efficiency of the public provision of education in Colombia between 2007 and 2014. The empirical analysis relies on a multiproduct function that assesses public performance considering two types of education products: quality and enrolment. Results for Colombian…

Fiscal multipliers are different across countries and according with economic circumstances. The studies about the effect of a government spending shock on output have focus their attention on the behavior of consumption. However, the crowding out of investment is also an important matter of…

One way to explain the rise in inflation from 2.89% in July 2014 to 8.60% in June 2016 is to analyze the contribution from each component of the CPI. This period was selected because it was when the peso began to depreciate sharply against the dollar.

Consumer prices in Colombia trended upward in the past two years. This section is an attempt to show to what extent this performance is explained by the price hikes in the border cities of Cucuta and Pasto. The annual price increases in those cities have exceeded the …

Abrupt and sudden movements in the exchange rate are a cause for concern among monetary authorities, because they can jeopardize compliance with the inflation target as a result of higher import and other prices in the economy, and given their impact on inflation …

Determinants of consumer credit are estimated by using information from a Credit Union located in Medellín-Colombia. To the best of our knowledge, this is the first investigation using this kind of data in Colombia. We find that life cycle-permanent income hypothesis (LC-PIH) related variables…

In 2013 Colombia implemented a tax reform which, among other things, reduced payroll taxes by a total of 13.5 percentage points of wages. In this paper we evaluate the effects of this component of the 2012 Colombian tax reform on firms’ formal employment and average wages. We construct a panel…

For a small open economy that receives external funding and is obliged to adapt to international credit and liquidity conditions, besides being an intensive producer and exporter of commodities (as is the case of Colombia and many other countries in the region), it is…

We estimate a model of real exchange rate determination which is based on interest rate, term structure and purchasing power parities. This model takes into account sovereign risk as a key determinant with possibly non-linear effects. Estimations are performed for five Latin-American economies:…

Presented on October 15 of 2016, during the "High-level policy seminar on  Open and orderly capital movements: does global co-operation matter?".

We evaluate the impacts of attending a public university in Colombia on the academic achievement of graduates from higher education. Our measurement of academic achievement represents the progress made between the college entrance and graduation standardized test scores. We find that public…

The world economy has recently been hit by commodity price fluctuations, with first round effects on noncore inflation and second round effects on core inflation. The policy response to commodity price fluctuations depends on the first and second round effects as well as on the strength of the…

This Appendix provides a more detailed discussion of the technical results, including proofs of theorems reported in the main paper. For ease of reference notation and definitions are repeated from the main paper.

Abstract: We investigate the effectiveness of foreign exchange interventions using the Colombian experience as a case study. Recent theoretical work emphasizes the importance of financial sector balance sheets and capital flows in determining the effects of currency…

The balance sheet is a snapshot that portraits the financial position of a firm at a specific point of time. Under the reasonable assumption that the financial position of a firm is unique and representative, we use a basic artificial neural network pattern recognition method on Colombian banks…

In this paper output gaps that include financial cycle information are evaluated against models used in policy analysis by the Colombian central bank. Employing this dataset is no trivial matter, since policy related models are the only relevant yardstick, and emerging economies (such as…

We study the interdependence between real commodity prices and world real GDP using long-term annual data since 1870, by performing two empirical exercises. First, we compute long-term and medium-term cycles and measure their degree of synchronization for different leads and lags. Second, we…

This paper studies the effects of an in utero program on birth outcomes addressed to vulnerable pregnant women. We use information from the Buen Comienzo program, an initiative run by the local government of Medellin, the second largest city of Colombia. In order to identify the effects we…