This paper investigates the possible responses of an inflation-targeting monetary policy in the face of asset price deviations from fundamental values. Focusing on the housing sector of the Colombian economy, we consider a general equilibrium model with frictions in credit market and bubbles in...

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...

This paper propose indicator variables for the implementation of monetary policy in an inflation targeting regime. Using constant interest rate projections, the notion of a target-compatible interest rate is presented. This variable allows to extract some characteristics that the expected future...

En este trabajo se analiza la respuesta dinámica de los precios de los bienes básicos más relevantes para la evolución de la inflación en Colombia ante choques en un conjunto de sus determinantes. El documento está basado en modelos VAR estructurales en los cuales los choques exógenos son...

La literatura referente a los modelos de inflación y política monetaria anti-inflacionaria del tipo denominado Inflation Targeting (IT) ha reforzado una opinión popular: que la inflación tiene poca o ninguna relación con el aumento de la cantidad de dinero. Esta opinión es contraria a una...

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...

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...

In the past decade the Colombian Economic Authorities undertook a series of measures that reduced the structural fiscal deficit, decreased the Government currency mismatch and deepened the local fixed-rate public bond market. This paper presents some evidence suggesting that these improvements...

El documento tiene como objetivo describir algunos de los elementos fundamentales del mercado interbancario colombiano y del manejo de liquidez por parte del Banco de la República (BR). El documento explica las diferencias entre las principales operaciones en este mercado y describe los...