This paper utilizes an open-economy New Keynesian overlapping generations model, the Global Integrated Monetary and Fiscal Model (GIMF), to assess the macroeconomic effects of external shocks and the impact of various monetary and fiscal policy responses. The simulations assess the effect of...

KEY ISSUES Context. Prudent macroeconomic policies have underpinned Colombia’s strong growth during the last few years, which exceeded that of most Latin American peers. Last year, the economy posted real growth of 4.6 percent, and average inflation remained near the center of the target...

Colombia has maintained a robust economic performance in recent years due in large part to its very strong policy framework. Well-anchored inflationary expectations, a flexible exchange rate, a structural fiscal balance rule, and effective financial supervision and regulation have contributed to...

Colombia has a strong fiscal framework that prescribes a prudent, albeit challenging, fiscal consolidation over the medium term. A number of changes have taken place over the past decade and a half to strengthen Colombia’s fiscal framework, including the introduction of a structural balance...

Financial inclusion has been one of the key pillars of Colombia’s development strategy for a number of years. Financial inclusion policies have aimed at channeling microcredit to poor, spreading formal banking system usage, fostering electronic payment acceptance, and making financial services...

Using data from Argentina, Australia, Colombia, El Salvador, Peru, and the United States, we identify three types of threshold effects when assessing the impact of economic activity on nonperforming loans (NPLs). For advanced financial systems showing low NPLs, there is an embedded...

We employ an extended version of the Allen et al. (2002) Balance Sheet Approach to examine macroeconomic vulnerabilities in Colombia between 1996 and 2003, based on an unusually rich data set. We find that vulnerabilities existing prior to Colombia''s 1999 recession-high levels of private debt,...

This paper examines the First Review Under the Stand-By Arrangement for Colombia. Under the authorities’ program, economic performance has been mostly favorable. Real economic growth appears to be recovering, led by a pickup in domestic demand that outweighed a decline in net exports....