This paper estimates an asymmetric error correction model to analyse the dynamic behaviour of the Colombian unemployment rate. We find evidence that wages above their long- run equilibrium level do increase unemployment, but wages below this level do not reduce it.

We apply a pair-wise approach to test the law of one price for deposit (lending) rates in Colombia. We find that when banks are of different size deposit rates adjust quickly, suggesting a competitive environment. By contrast, lending rates adjust rapidly when banks are of similar size,...