The recent financial crisis has brought to the forefront the need for a better understanding of the transmission mechanisms of monetary policy. The main step forward on this issue has drawn on work aimed at stressing the role of the financial sector in this transmission. Particular emphasis has...

We explore the performance of a set of early warning indicators for a group of Latin American economiesunder the endogenous cycle perspective. For this group of countries, the paper confirms the resultsof previous work on industrialized countries, which indicate that a combination of asset...

The recent financial crisis has renewed the interest of economists, both at the theoretical and empirical level, in developing a better understanding of credit and its mechanisms. A rapidly growing strand of the literature views banks as facing funding restrictions that condition their borrowing...

We compute both seigniorage rate and welfare costo f inflation rate in Colombia using a Sidrauski-type model in which preferentes are nonseparable functions of the service flows of non - durable goods and money holdings.

Using Bayesian estimation techniques, we estimatea small open economy dynamic stochastic generalequilibrium model with credit-market imperfectionsfor the Colombian economy. We show thatthe combination of balance sheet effects and thechoice of monetary policy regime are likely to playan important...

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...

In this paper we investigate the impact of rapid credit growth on ex ante credit risk. We present microeconometric evidence of the positive relationship between rapid credit growth and deterioration in lending portfolios: Loans granted during boom periods have higher probability of default than...