Capital Flows and Monetary Policy

Capital flows often confront central banks with a dilemma: to contain the exchange rate or to allow it to float. To tackle this problem, an equilibrium model of capital flows is proposed. The model captures sudden stops with shocks to the country risk premium. This enables the model to deal with capital outflows as well as capital inflows. From the equilibrium conditions of the model, I derive an expression for the accounting of net foreign assets, which helps study the evolution of foreign debt under di¤erent policy experiments. The policy experiments point to three main conclusions. First, interest rate defenses of the exchange rate can deliver recessions during capital outflows even in financially resilient economies. Second, during unanticipated reversals in capital inflows, the behavior of foreign debt is not necessarily improved by containing the exchange rate. Third, an economy can gain resilience not by simply shifting the currency denomination of debt, but by both, shifting the denomination and floating the currency.Sudden stops; Credit booms; Country risk; Fear of floating; Debt sustainability

Inflation Targeting, Sudden Stops and the Cost of Fear of Floating

Sudden stops seem to create the perfect environment for disinflation, especially when central banks defend the exchange rate by increasing interest rates. We propose a variation of the output gap model that incorporates the sudden stop shock. The use of the model in policy analysis shows that fear of floating is pro-cyclical and inflation targeting, counter-cyclical. The model is run for Brazil, Colombia, Korea and Thailand, the inflation targeting countries that have recently had sudden stops. The three policy implications direct attention to the medium and long run. First,the central banks that are targeting inflation should focus on inflation, not during but after the sudden stop. Second, they could complement this medium term view by monitoring a measure of inflation of non traded goods. Third, the monetary authorities could eventually introduce an escape clause to the CPI inflation target under a sharp depreciation.

An Empirical Model of International and Domestic Food Inflation

En empirical model of the pass-through of international to domestic food inflation is proposed. The key liking variable between international and domestic food inflation of food products in the PPI for food imports and exports. Not only the inflation rates of the relevant countries but also their exchange rates can exert important influences on the prices of imported and exported food products.Food inflation, International food inflation. Classification JEL: E17.

A Framework for Macroeconomic Stability in Emerging Market Economies

In this paper, sectoral balance sheets and sectoral stock and flow consistency are embedded into a new open economy model based on the financial accelerator. The framework has nominal inertia, real rigidities and market frictions, and it is designed to evaluate exchange rate risk in the economy and across sectors. The model is perturbed by a shock to investor sentiment and a sudden stop to capital inflow. It is used to evaluate the claims that usually back the fear of floating strategy: the effect of the exchange rate on foreign debt, and the pass-through of exchange rate depreciation to inflation. We conclude that fear of floating, the policy that intends to stabilize foreign debt, is precisely the policy that leads to a higher increase in the government debt to GDP ratio. The reason is that, in order to control the exchange rate, the authorities have to increase interest rates. While a lower depreciation does contain the level of debt, it increases the cost of interest on the debt, and this increases the change in the debt to GDP ratio. The pass-through does not seem an important argument for fear of floating either. We also find that under fear of floating the transfer problem is solved by the private sector alone in the midst of a recession; and that under floating, the government balance is in surplus thereby contributing to the transfer..

Sociología: ciencia, política e ideología en el cruce de entresiglos

En el presente trabajo pretendemos recoger una serie de ideas y reflexiones acerca del estado actual de la teoría sociológica, buscando ubicar a las diferentes perspectivas y enfoques predominantes en el análisis de lo social. La realización de este ejercicio, pretendemos que sea de utilidad para trazar una especie de mapa intelectual que nos ayude a distinguir los distintos niveles y planos desde los que se construye el universo del razonamiento sociológico y su situación en el terreno de la geopolítica y del debate ideológico que con frecuencia contamina el quehacer sociológico

El poder político y el sujeto en la época de la globalización

En este ensayo se reflexiona sobre los cambios que el poder político y el sujeto están observando a raíz de la dinámica acelerada que vive el mundo contemporáneo moderno, el que hoy ha dado un giro hacia el neoliberalismo y presenta un avasallador proceso de globalización, apoyado en los avances tecnológicos y científicos que agilizan las comunicaciones y acortan las distancias. En esta situación, el poder económico se ha superlativizado como el real poder que evidencia lo antiguo de las pretensiones de construcción de un poder legitimador enclavado en los Estados nacionales soberanos, que ahora viven un proceso de difuminación de sus pretendidas capacidades en concreción inconclusa en todo su proceso histórico, con lo que se ha vulnerado su legitimidad y principal fuente de producción y reproducción, en tanto entidad organizadora de lo político y lo social

Procesos Gravitacionales en el municipio de Lerma, Estado de México

En la presente investigación se realiza un análisis para establecer áreas susceptibles a procesos gravitacionales mediante la aplicación de un análisis multicriterio en el municipio de Lerma de Villada en el Estado de México. La interpretación y análisis de los resultados permitieron establecer sitios que posee el municipio de Lerma a movimientos en masa, permitiendo ubicar zonas susceptibles a los procesos gravitacionales e identificar el tipo de movimiento; y con ello, establecer medidas de corrección o de mitigación. El análisis multicriterio, es un método que permite relacionar un conjunto de alternativas bajo múltiples criterios y objetivos en conflicto, ayudando a la toma de decisiones para establecer correcciones a una problemática

Regalo y dinero en la unión conyugal. Una exploración en Cali

REVISTA SOCIEDAD Y ECONOMIA # 19

Wage Indexation, Inflation Inertia, and The Cost of Disinflation

Abstract A Statement of the Colombian Constitutional Court has mandated wage indexation on the basis of past inflation. A simple model with a wage price system, a real block, and an inflation targeting interest rule is calibrated to resemble price setting in the Colombian economy and to analyze the differing slope of the output inflation trade off for different specifications of wage indexation. The disinflation experiments show that backward looking indexation increases inflation inertia, decreases the effect of monetary policy, and increases the cost of disinflation. Shorter wage contracts and more frequent wage negotiations do not appear to have important effects on the cost of disinflation. Higher central bank credibility and the use of forward looking inflation expectations in wage negotiations decrease the cost of disinflation and may eventually lead to a boom.