Banco De La Republica Research Articles

La creación del Banco Central en Uruguay y Argentina en la década de 1930: El papel de los economistas y sus ideas

The institutional framework reform for monetary management in Argentina and Uruguay between 1930 and 1935 is approached in a comparative way. Despite differences between the countries’ institutions (for example, Argentina had a Currency Board and Uruguay did not), the cautious handling of monetary policy between 1890 and 1930 was an important element in the international insertion of both. In 1935 Argentina and Uruguay took different paths. Uruguay created an Issuance Department within the Banco de la Republica (a commercial bank with Central Bank functions). Argentina created the Central Bank of the Argentine Republic (BCRA) with a heterodox profile for that time. My general hypothesis is that the ideas of leading economists and the way they entered the political process played a decisive role in these different paths. The ideas of key economists in the reform process will be reviewed.

Análisis de la evolución de la inversión extranjera directa en el sector minero del carbón en Colombia de 2004 a 2013

En este artículo se analiza la evolución de nla invresión extranjera directa (IED) en el sector minas y canteras y en la extracción de carbón, lignito y turba en Colombia en el periodo de 2004 a 2013, utilizando Minero Colombiano. Se presenta un panorama del sector minero del carbón en Colombia y la evolución de la IED en el periodo descrito. Se concluye que el sector minero del carbón en Colombia posee un enorme potencial que favoreció la entrada de capitales foráneos durante el periodo, pero terminó siendo un indicador de la primarización de la IED en el país en el mismo periodo.

Relación entre política monetaria y estabilidad financiera: un análisis aplicado para Colombia

This paper analyzes the relationship between monetary policy decisions and financial stability conditions, considering the asset prices as the key variable. The econometric estimates show that the Banco de la Republica has not had any response between 1996 and 2012 to the variables associated with financial stability, such as the gap in asset prices and credit. In this sense, we adapt and calibrate a theoretical model that shows that when the central bank responds to the gap in asset prices there is greater financial stability. Therefore one can see that the gaps in share prices and housing prices respond positively to a monetary expansion, defining with it the existence of a mechanism by which the Central Bank of Colombia will affect the financial stability.

Un análisis VAR estructural de política monetaria en Colombia

<p>Este trabajo utiliza la metodología VAR estructural, con restricciones de corto plazo impuestas por el modelo macroeconómico de comportamiento AD-AS, para identificar las relaciones contemporáneas entre las variables endógenas del sistema que imponen las curvas oferta agregada, la LM y la MP. También se analizan los efectos dinámicos de choques en la tasa de intervención del Banco de la República sobre el crecimiento económico y la inflación. Los resultados de las curvas contemporáneas MP indican que hay una relación estadísticamente significativa y positiva contemporánea entre las variables tasa de intervención del Banco de la República y la inflación. El análisis dinámico vía respuesta impulso indica que solamente los choques positivos de las diferencias de la tasa de intervención tienen efectos negativos rezagados y cíclicos sobre la inflación. Choques positivos de política monetaria tienen efectos negativos y significativos sobre el crecimiento económico. A través de la descomposición de varianza se encontró que ante choques de política monetaria se presentan mayores efectos acumulados en el crecimiento económico que en la inflación, y en esta última solamente cuando la tasa de intervención está en diferencias.</p>

Scientific financial funding in Colombia from 2000 to 2012

This study evaluates trends in funding for Science, Technology and Innovation, Research and Development and COLCIENCIAS (Administrative Department for Science, Technology and Innovation) between 2000-2006 and 2007-2012. Available data from the World Bank, OCYT (Colombian observatory of science and technology), DANE (National statistics department), Banco de la Republica and COLCIENCIAS to evaluate funding source by sector (private, public and international), financial growth rate, financial expenditure, and activity related expenses from 2000 to 2012, and regression models to estimate financial trends. COLCIENCIAS funding increased in the past years; Science, Technology and Innovation, and Research and Development funding increased from $1,296.7 million US dollars in 2000-2006 to $2,766.4 million US dollars in 2007-2012. The financial analysis showed a significant increase in public funding mainly by government (p<0.05); however, government and corporation expenditure did not vary from 2000 to 2012.

Too-Connected-To-Fail Institutions and Payments System’s Stability: Assessing Challenges for Financial Authorities

The most recent episode of market turmoil exposed the limitations resulting from the traditional focus on too-big-to-fail institutions within an increasingly systemic-crisis-prone financial system, and encouraged the appearance of the too-connected-to-fail (TCTF) concept. The TCTF concept conveniently broadens the base of potential destabilizing institutions beyond the traditional banking-focused approach to systemic risk, but requires methodologies capable of coping with complex, cross-dependent, context-dependent and non-linear systems.After comprehensively introducing the rise of the TCTF concept, this paper presents a robust, parsimonious and powerful approach to identifying and assessing systemic risk within payments systems, and proposes some analytical routes for assessing financial authorities’ challenges. Banco de la Republica’s approach is based on a convenient mixture of network topology basics for identifying central institutions, and payments systems simulation techniques for quantifying the potential consequences of central institutions failing within Colombian large-value payments systems.Unlike econometrics or network topology alone, results consist of a rich set of quantitative outcomes that capture the complexity, cross-dependency, context-dependency and nonlinearity of payments systems, but conveniently disaggregated and dollar-denominated. These outcomes and the proposed analysis provide practical information for enhanced policy and decision-making, where the ability to measure each institution’s contribution to systemic risk may assist financial authorities in their task to achieve payments system’s stability.

Foreign Reserves’ Strategic Asset Allocation

Despite foreign reserves’ strategic asset allocation relies mainly on Modern Portfolio Theory (MPT), the unique characteristics of central banks obliges them to articulate and reconcile typical optimization procedures with reserves’ management objectives such as providing confidence regarding the ability to meet the country’s external commitments. Moreover, further involvedness come from broad economic factors as diverse as the openness of capital and current accounts, external debt’s maturity and currency composition, and exchange rate regime.Therefore, in order to alleviate the divergence from theory and practice regarding foreign reserves’ strategic asset allocation, this paper describes the methodologies and procedures developed and employed by the Foreign Reserves Department of Banco de la Republica. The mainstay of the paper is a long‐term‐dependence‐adjusted and non‐loss‐constrained version of the Black‐Litterman model for obtaining the efficient frontier from a set of investments complying with safety, liquidity and return criteria, where the choice of the portfolio which maximizes utility makes use of an estimation of the Board of Directors’ risk aversion.Results exhibit the effects of the unique nature of foreign reserves management for emerging markets. Typical features of foreign reserves management by central banks, such as non‐loss restrictions due to capital preservation objectives, result in increased complexity in the optimization process and in asset allocations significantly distant from standard MPT’s optimality.

Reconstructing Colombia's recent history of monetary policy from 1990 to 2010

Este articulo presenta una reconstruccion de la historia de la politica monetaria del Banco Central de Colombia (Banco de la Republica) en el periodo 1990 a 2010 durante el cual se implemento una politica explicita de metas de inflacion en octubre de 2000. Para lograr nuestro objetivo, desarrollamos una regla teorica de Taylor modificada con suavizacion de tasa de interes para una economia pequena y abierta; consecuentemente, estimamos un modelo de cambios de regimen (Markov switching) de dos regimenes, el cual admite que las fechas de cambio de regimen sean determinadas de manera endogena. Encontramos que uno de los regimenes, que corresponde al periodo 2000 a 2010, coincide con fijacion explicita de las metas de inflacion por parte del Banco de la Republica, en donde la tasa de inflacion tuvo un comportamiento de serie estacionaria, consistente con que el Banco de la Republica cumplio con el principio de Taylor. Dicho regimen de politica monetaria se habia presentado en algunos trimestres antes del 2000, pero no como el regimen predominante. El otro regimen prevalecio durante la decada de los noventa, pero no cumplio con el principio de Taylor en general debido a que permitio un comportamiento de raiz unitaria de la tasa de inflacion. Finalmente, no encontramos evidencia de que el Banco de la Republica haya cambiado su comportamiento en cuanto a las fluctuaciones del producto durante el periodo estudiado.

Del sombrero al árbol. Relatos icónicos de la nación colombiana

In four episodes the way is narrated as four objects of the movable patrimony became iconic stories of the Colombian nation: The first episode talks about to the painting of Pedro Jose Figueroa, Post Nubila Faebus. SIMON BOLIVAR, LIBERATOR y Padre de la patria, that makes the transit of the concepts of Freedom, Mother country, Colombia and Allegory of America. The second episode deals with the diffusion of “the Tree of the Freedom” in the Nuevo reino de Granada during the Illustration and the change that suffered due to the declaration of Independence. A work of anonymous author can be considered like the representation of the ceremony of seedtime of the tree. The rooted transit of the mother country concept is analyzed so, to its loss of prestige and at the present time, to its vindication. The third episode narrates of how the Poporo quimbaya got to become icon, between near 33,600 pieces of the Museo del Oro del Banco de la Republica. Their geometric form, the material and myth of El Dorado, contributed to their iconizacion. The fourth episode deals with the Virgen de Chiquinquira (La Chinca) (1556) tie to the miracle of the renovation in the society colony. The colony with independence, the devotion with the nationality connects itself. One concludes with a question on Whom it creates the representations of the nationality, the artist, the town, the museums? and on the validity of the iconografics representations.

Cambios de la Tasa de Política y su Efecto en la Estructura a Plazo de Colombia

Banco de la Republica, ColombiaThis paper analyzes the effects of changes of Banco de la Republica’s policy inter-est rate in the term structure. The evidence suggests that, in daily frequency, these reactions are not significant. However, with weekly data we found an anticipated reaction (one and three weeks before the movement) in the term structure in re-sponse to a change in the policy interest rate. Unfortunately the reaction has a “steepness effect” on the term structure, which may not support the expectations hypothesis of interest rates or may suggest a weak credibility and transparency of Banco de la Republica or both.JEL: