Publications

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…

CURRENT SITUATION OF THE COLOMBIAN ECONOMYThis is the first edition of a new publication by the Governor of the Central Bank of Colombia. It is addressed to citizens, analysts, and domestic and foreign investors interested in learning about the most recent events in the…

We use the recently developed panel rank-cointegration test proposed by Pedroni et al. [2015] to check for the stability conditions of the cross-country money market interest rate bases. Using weekly information on short-term interest rates and spot and forward exchange rates for a set of 20…

This study reports evidence of the existence of house price bubbles in several Canadian provinces around the recent global financial crisis. Using a wealth of monthly data for about a thirty-year period we find evidence supporting the hypothesis that the bubble in Quebec transmitted to four…

In an open-economy model with financial constraint, Schmitt-Grohé and Uribe (2017) propose an expression for a capital control policy. From this expression, they argue that the optimal tax, i.e. the one that solves the overborrowing problem, is indeterminate when crises occur (i.e. when the…

This paper presents an estimation of expenditure needs and fiscal capacity of Colombia’s municipalities and departments in 2014. We use standard per capita norms to estimate the spending needs and data envelopment analysis for the local fiscal capacity.

The behavior of production and foreign trade in the country’s industrial manufacturing sector was analyzed in previous editions of this report, with special emphasis on how they react to changes in the exchange rate for the dollar. It also was suggested that the recent…

The behavior of the external balance in current pesos is characterized by a decline in the trade deficit for goods and services since the fourth quarter of 2015 (Graph B1.1).

Loans awarded by lending institutions for consumption and the purchase of housing, hereinafter referred to as bank loans, constitute the current measurement of household indebtedness. The indicator presented below expands the coverage of sources and types of financing.

We carry out a reading analysis that consists of two elements. First, we observe the coherence between monetary policy actions and press releases. In this case, we found that inflation and growth are significant themes in the adoption of the policy measures between September 2004 and March 2016…

In complex systems, homogeneity (i.e. lack of diversity) has been documented as a source of fragility. Likewise, financial sector’s homogeneity has been documented as a contributing factor for systemic risk. We assess homogeneity in the Colombian case by measuring how similar banks are regarding…

THE ADJUSTMENT OF THE COLOMBIAN ECONOMY AND THE DYNAMICS OF THE EXTERNAL SECTORThis is the second edition of a publication by the Governor of the Central Bank of Colombia, addressed to citizens, analysts, and domestic and foreign investors interested in learning about the most recent events in…

Mergers of firms producing complementary products have ambiguous effects on consumer welfare. Consumers benefit if the firm, motivated by the internalized profits created by the complementarity, lowers prices. Consumers are hurt if the firm uses bundles to exert price discrimination, making…

Vacancies are the center of any job creation process. In this paper, we study firms’ hiring behavior in a way that is directly related to vacancies. To understand the dynamic relationship between hires and vacancies, we estimate what we called a hiring function. Even though we cannot observe…

Abstract: The paper provides some evidence on the relevance of global uncertainty and risk aversion and the lesser importance of US interest rates for the global financial and business cycles. As framework, we use a global semi-structural model augmented with financial and…

Foreign direct investment (FDI) becomes a major source of long-term financing in economies with technological and capital constraints. Countries with limited savings capacity or underdeveloped financial markets do not have enough resources to expand their production frontier…