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...

This paper is concerned with interest rate setting by commercial banks and how the transmission of monetary policy is re°ected in these rates. For this purpose we study the case of the Colombian banking industry for the period 1996-2004. Using microdata, the Certi¯cate of Deposit(CD) market...

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...

En este trabajo se utilizan tasas marginales de interés, tasas de cambio forwards y encuestas sobre expectativas de devaluación con el fin de verificar las hipótesis de paridad cubierta (PC) y no cubierta (PNC) de las tasas de interés en Colombia en el período 2000-2007. Se encuentra...

Este documento resume las principales conclusiones del ejercicio realizado con el objetivo de analizar la forma cómo algunos países emergentes, con diversos esquemas de política monetaria, manejan su política cambiaria. La pregunta que suscitó este análisis fue: ¿Cómo han logrado los...

The Colombian economy experienced several shocks in the past ten years. The permanent fall of inflation, the adoption of inflation targeting (IT) and a financial crisis altered the transmission mechanism of monetary policy. Low inflation and IT reduced inflation persistence and contributed to...

Uno de los hechos estilizados más recientes alrededor del mundo es que, después de varias décadas, se está convergiendo a una inflación baja y estable. Algunos países ya llegaron a su estado estacionario en este sentido y otros aún están en proceso de desinflación. Dado que la...

The adoption of a managed regime assumes that interventions are relatively successful. However, while some authors consider that foreign exchange interventions are ineffective, arguing that domestic and foreign assets are close substitutes, others advocate their use and maintain that their...

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...

Using a three-equation New Keynesian model we find that incorporating an escape clause (EC) into Forward Guidance (FG) is welfare improving as it allows the monetary authority to avoid cases in which the cost of reduced flexibility is too high. The EC provides the central bank with another...