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...

This manuscript can be divided into two main parts. The first one, using a simple example by Minford (2004) and Hatcher (2011), gives the reader a basic introduction to understand the comparison between two monetary-policy regimes: Inflation Targeting (IT) and Price-Level Targeting (PLT). The...

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...

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...

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...

Este documento describe la política monetaria aplicada en Colombia durante el período 1990-2007 antes de la crisis financiera mundial del presente siglo y analiza la incidencia que tuvo el resultado de dicha política sobre la tasa de paridad de intereses. Para probar la hipótesis de paridad...

Este documento investiga la importancia del canal del crédito bancario de la política monetaria en una economía abierta y pequeña como la colombiana. Usando el modelo de panel dinámico Método de Momentos Generalizados (MMG), propuesto por Arellano y Bover (1995), se estima una función de...

Este trabajo busca determinar si la política monetaria puede proporcionar una explicación parcial a las diferencias que existen en el comportamiento de los ciclos económicos entre las regiones de Colombia, así como también establecer la importancia que tienen en la explicación de estas...

The downturn in the world economy following the global banking crisis has left the Chinese economy relatively unscathed. This paper develops a model of the Chinese economy using a DSGE framework with a banking sector to shed light on this episode. It differs from other applications in the use of...

Exploiting the heteroscedasticity of the changes in short-term and long-term interest rates and exchange rates around the FOMC announcement, we identify three structural monetary policy shocks. We eliminate the predictable part of the shocks and study their effects on financial variables and...