Publications

The private corporate sector is the primary debtor in the Colombian financial system (commercial loans account for 54.9% of the total gross portfolio). Consequently, it is extremely important to measure and monitor the risk this sector of the economy might pose to the financial system. Ever…

Elements of both supply and demand interact during a financial crisis, which explains the precarious growth in credit. Nonetheless, it is important that demand-side incentives be generated ex post. These also help to reactivate loans by fueling the supply of credit. The latter usually remains…

The importance of properly monitoring and regulating liquidity risk is associated with systemic risk and with stability of the financial system. If institutions do not measure liquidity risk adequately and if it is not well regulated, financial institutions could see their positions affected by…

Several governments still need to adjust their fiscal balance after the Great Recession. In this paper, I construct a novel dataset to estimate the revenue potential and expenditure cutting space for a cross-section of 150 countries, and decompose their fiscal capacity into specific taxes and…

Based on individual data on the population of those arrested in Medellín, we assess whether the change in punishment at age 18, mandated by law, has a deterrent effect on arrests. No deterrent effect was found on index, violent or property crimes, but a deterrence effect was found on non-index…

Paper presented at BIS Annual Meeting of Central Bank Governors.

Obesity is widely accepted as one of the main causes of premature death, and the causal relationship between obesity and several of the most deadly chronic diseases is a consensus in the medical and public health literature. Obesity in the United States has recently been recognized as a public…

We assess the causes and implications of the greater nancial participation in commodity markets post-2003. Focusing on crude oil, we build a calibrated macro-nance model of oil prices and quantities that also determines consumer welfare. We show that shifts in the preferences and constraints…

This paper addresses the estimation of peer group effects on a fertility decision. The peer group is composed of neighbors with similar socio-demographic characteristics. In order to deal with the endogeneity problem associated to the estimation of neighborhood effects, an instrumental variables…

International reserves are very important for emerging economies, as they allow to buffer possible liquidity vulnerabilities within a countries' balance of payments. Consequently, the issue of how many reserves should each country hold is a relevant issue for economic policy. The literature has…

Paper presented al the "Investor Seminar at the time of the IMF/World Bank Annual Meetings 2009", for the panel "Emerging Markets in the Context of the End of the Global Recession", organized by JPMorgan.

Documento presentado en el Seminario Semanal de Economóía 130 "El Efecto de los pares en una decisión de fertilidad: Una aplicación para Medellín"

We set a dynamic stochastic model for the interbank daily market for funds in Colombia. The framework features exogenous reserve requirements and requirement period, competitive trading among heterogeneous commercial banks, daily open market operations held by the Central Bank (auctions and…

This paper can be divided into two main parts. The first one, using a simple example by Minford (2004) and Hatcher (2011), gives the reader a basic introduction to understand the comparison between two monetary-policy regimes: Inflation Targeting (IT) and Price-Level Targeting (PLT).

To date, there is still great controversy as to which exchange rate model should be used or which monetary channel should be considered, when measuring the effects of monetary policy. Since most of the literature relies on structural models to address identification problems, the validity of…

The importance of the banking sector as a key player in interest rate passthrough has been recognized recently in literature concerning monetary policy transmission mechanisms. The interest rate channel, which operates when banks pass on changes in the monetary policy rate to interest rates for…

Financial institutions rate loans as an expression of the risk they believe the client poses. With the data from those ratings, they can evaluate the current quality of their balance sheet and calculate the loan-loss provisions required for their loan portfolio. A loan rating also is an…

Recent months have seen a much larger influx of funds into the Colombian stock market. For example, pension fund mangers (PFM) added Col$5.84 trillion (t) to their stock market investments between 2002 and 2006 (Financial Market Superintendent, 2007), and foreign portfolio investments (short and…