Leaning against the wind: Effects of macroprudential policy on sectoral

Abstract. Use of macroprudential policies in recent years has gained relevance in different economies. As a result of the financial crisis in 2008, this instrument was useful in emerging economies to reduce the effects of the adverse international context. The relationship between financial intermediation and the real sector is positive, in response to shocks in productive credit the sectoral growth is 0.15pp in 2016. Likewise, the modification of the reserve requirement rate can provide or with draw liquidity from the financial system, in the first case, the objective is to increase portfolio placement, which affects the development of productive sectors. Therefore, there is a need to evaluate the effect of changes in the reserve requirement rateon sectoral growth in Bolivia, which was offset by the financial cycle because episodes of Credit Crunch affect the real sector (the economic cycle is amplified to the downside). The methodologies used are the Fixed Effects (FE), Random Effects (RA) and Panel Autoregresive Vectors (Panel-VAR) and recursive versions of them. The positive effects of the macroprudential policy and changes in the position that this instrument had over time, depending on the financial cycle, Leaning Against the Wind. Reserve requirement ratedecreasesof the national currency has positive impact on sectoral growth and tests with recursive versions shows positive effects and increase of credit towards the sectoral activity.Keywords. Reserve requirements, Interest rate, Fixed effects (EF), Random effects (RE), Panel VAR, Recursive estimation, Leaning against the wind.JEL. C50, E51, E52

Efectos de la inversión en capital Humano en un contexto de equilibrio General

Investment in education is important, since it affects people's labor productivity and their remuneration. In this sense, the following work will develop a General Equilibrium Model that incorporates the theory of economic growth, in line with Paul Romer (1986), suggested the presence of externalities in research and development spending; and in turn Robert Lucas (1988) who focused his analysis of externalities on the formation of human capital. The research includes an analysis period between 1996 - 2017. The results indicate that shocks in investment of human capital have expansionary effects on real wages 0.03%, as well as the decreasing returns on wages due to increases in education as proposed by Mincer (1985). On the other hand, we evidenced that increases in wages have positive effects on economic growth in the short term of 0.02% (from the third period) but the persistence is null in the impulse response functions

Microfundamentos de una Regla de Política Monetaria, Regla de Poole

El marco de la política monetaria de muchos países se desarrolla bajo un esquema de metas de inflación (Inflation Targeting Framework), lo cual plantea que un banco central fija la tasa de interés. La conocida Regla de Taylor, es la regla de política monetaria aplicado en la evidencia empírica para la modelación de mecanismos de transmisión de un Banco Central. Los microfundamentos en términos Log-lineales son consistentes en línea con Kranz (2015), sin embargo países como: China, Nigeria, Bolivia, Yemen, Suriname, entre otros, se encuentran bajo un marco distinto, control de la oferta monetaria (el FMI lo define como Monetary Aggregate Target). La Regla de MacCallum propuesta en los 80´s sería la más apropiada para describir los mecanismos de transmisión de la política monetaria en este tipo de economías. Pero en la presente investigación se optó por fundamentar una regla de política monetaria distinta a las convencionales. Gracias al aporte de William Poole en 1970, nuestra Regla de Política explica que la oferta monetaria reacciona al comportamiento de cinco (5) variables: brecha del producto, brecha de la tasa de interés, tasa de interés observada, expectativas del producto y de la inflación; por lo cual denominamos a este instrumento la Regla de Poole. A través de un Modelo de Equilibrio General Dinámico Estocástico (DSGE) comprobamos si dicha regla es apropiada para economías bajo un esquema diferente de Inflation Targeting Framework

Microfoundations of a Monetary Policy Rule, Poole's Rule

The monetary policy framework of many countries has been developed under an Inflation Targeting Framework, which is a fixed central bank interest rate. The well-known Taylor's Rule is the rule of monetary policy applied in empirical evidence for the mode of transmission mechanisms of the Central Bank. Microfoundations in Log-linear terms are consistent in line with Kranz (2015), however countries such as: China, Nigeria, Bolivia, Yemen, Suriname, among others, are in a different framework, control of the money supply (the IMF defines as Monetary Objective Aggregate). The MacCallum's Rule proposed in the 1980s would be more appropriate to describe the transmission mechanisms of monetary policy in this type of policy. But in the present investigation it is based on a monetary policy rule different from the conventional ones. Thanks to the contribution of William Poole in 1970, our Policy Rule explains that the money supply reacts to the behavior of five (5) variables: product gap, interest rate gap, observed interest rate, product expectations and inflation; for what we call this instrument the Poole's Rule. Through a Dynamic Stochastic General Equilibrium Model (DSGE) we check if said rule is appropriate for economies under a different Inflation Targeting Framework

Microfoundations of a Monetary Policy Rule, Poole's Rule

The monetary policy framework of many countries has been developed under an Inflation Targeting Framework, which is a fixed central bank interest rate. The well-known Taylor's Rule is the rule of monetary policy applied in empirical evidence for the mode of transmission mechanisms of the Central Bank. Microfoundations in Log-linear terms are consistent in line with Kranz (2015), however countries such as: China, Nigeria, Bolivia, Yemen, Suriname, among others, are in a different framework, control of the money supply (the IMF defines as Monetary Objective Aggregate). The MacCallum's Rule proposed in the 1980s would be more appropriate to describe the transmission mechanisms of monetary policy in this type of policy. But in the present investigation it is based on a monetary policy rule different from the conventional ones. Thanks to the contribution of William Poole in 1970, our Policy Rule explains that the money supply reacts to the behavior of five (5) variables: product gap, interest rate gap, observed interest rate, product expectations and inflation; for what we call this instrument the Poole's Rule. Through a Dynamic Stochastic General Equilibrium Model (DSGE) we check if said rule is appropriate for economies under a different Inflation Targeting Framework

Microfundamentos de una Regla de Política Monetaria, Regla de Poole

El marco de la política monetaria de muchos países se desarrolla bajo un esquema de metas de inflación (Inflation Targeting Framework), lo cual plantea que un banco central fija la tasa de interés. La conocida Regla de Taylor, es la regla de política monetaria aplicado en la evidencia empírica para la modelación de mecanismos de transmisión de un Banco Central. Los microfundamentos en términos Log-lineales son consistentes en línea con Kranz (2015), sin embargo países como: China, Nigeria, Bolivia, Yemen, Suriname, entre otros, se encuentran bajo un marco distinto, control de la oferta monetaria (el FMI lo define como Monetary Aggregate Target). La Regla de MacCallum propuesta en los 80´s sería la más apropiada para describir los mecanismos de transmisión de la política monetaria en este tipo de economías. Pero en la presente investigación se optó por fundamentar una regla de política monetaria distinta a las convencionales. Gracias al aporte de William Poole en 1970, nuestra Regla de Política explica que la oferta monetaria reacciona al comportamiento de cinco (5) variables: brecha del producto, brecha de la tasa de interés, tasa de interés observada, expectativas del producto y de la inflación; por lo cual denominamos a este instrumento la Regla de Poole. A través de un Modelo de Equilibrio General Dinámico Estocástico (DSGE) comprobamos si dicha regla es apropiada para economías bajo un esquema diferente de Inflation Targeting Framework

Leaning Against the Wind: Efectos de la Política Macroprudencial en el Crecimiento Sectorial

El uso de políticas macroprudenciales en los últimos años cobro relevancia en diferentes economías. A consecuencia de la crisis financiera de 2008, este instrumento fue de utilidad en economías emergentes para disminuir los efectos del adverso contexto internacional. La relación entre la intermediación financiera y el sector real es positiva, a 2016 la respuesta del crecimiento sectorial a shocks en el crédito productivo es de 0.15pp. Asimismo, la modificación de la tasa de encaje legal puede proveer o retirar liquidez del sistema financiero, en el primer caso, el objetivo es incrementar de colocación de cartera, lo cual repercute en los sectores productivos y su desenvolvimiento. Por lo tanto, surge la necesidad de evaluar el efecto de ese instrumento (encaje legal) en el crecimiento sectorial de Bolivia, contralado por el ciclo financiero porque episodios de Credit Crunch afectan al sector real (se amplifica el ciclo económico a la baja). Las metodologías empleadas fueron del Método de Efectos Fijos (EF), Aleatorios (EA) y Vectores Autoregresivos en panel (Panel-VAR) y versiones recursivas de los mismos. Las estimaciones muestran los efectos positivos de la política macroprudencial y cambios en la postura que tuvo este instrumento a lo largo del tiempo, en función al ciclo financiero, Leaning Against the Wind. Bajas en la tasa de encaje legal de moneda doméstica impactan positivamente en el crecimiento sectorial y se evidencia con las versiones recursivas efectos positivos e incrementos paulatinos del crédito hacia a la actividad sectorial

Construcción de una Bolivia artificial: Efectos de la Política Económica desde 2006

In recent years the need arose to assess the effects of the policies implemented since 2006 in Bolivia. A document that refutes the results achieved by the government of Evo Morales (Chumacero R., 2019), indicates that the growth achieved between 2006 and 2016 was luck. However, the characteristics and assumptions indicated in that document can be for any economy, because it omits characteristics of the Bolivian economy. In this sense, our proposal, through the application of the synthetic control method, encompasses 24 predictors, divided into 5 dimensions, where idiosyncratic variables that characterize the Bolivian economy are identified, for example, income by mineral and natural gas. The results of the methodology indicate a close coincidence between Bolivia observed and synthetic Bolivia pretreatment, before 2005. From 2008 there is a greater difference between the real and counterfactual per capita GDP, showing positive effects of the policies implemented by the government of Evo Morales (2006 - 2016), on average 6% above synthetic Bolivia, resulting in USD333 (measured in Purchasing Power Parity)

Microfundaments of a Monetary Policy Rule, Poole's Rule

The monetary policy framework of many countries has been developed under an Inflation Targeting Framework, which is a fixed central bank interest rate. The well-known Taylor's Rule is the rule of monetary policy applied in empirical evidence for the mode of transmission mechanisms of the Central Bank. Microfoundations in Log-linear terms are consistent in line with Kranz (2015), however countries such as: China, Nigeria, Bolivia, Yemen, Suriname, among others, are in a different framework, control of the money supply (the IMF defines as Monetary Objective Aggregate). The MacCallum's Rule proposed in the 1980s would be more appropriate to describe the transmission mechanisms of monetary policy in this type of policy. But in the present investigation it is based on a monetary policy rule different from the conventional ones. Thanks to the contribution of William Poole in 1970, our Policy Rule explains that the money supply reacts to the behavior of five (5) variables: product gap, interest rate gap, observed interest rate, product expectations and inflation; for what we call this instrument the Poole's Rule. Through a Dynamic Stochastic General Equilibrium Model (DSGE) we check if said rule is appropriate for economies under a different Inflation Targeting Framework

Impulse on the Aggregate Demand in Bolivia through the Coordination of the Monetary and Fiscal Policy in Crisis Time

Abstract. At the end of 2014, the Bolivian economy, despite facing negative external shocks (falling oil prices), registered a high economic growth in the region of Latin America. Monetary policy was aimed at keeping the government bond rate close to zero and raising liquidity levels in the economy (monetary policy expansive). On the part of the government, the two main sources of income of the nonfinancial public sector (SPNF) are: i) tax revenues and ii) the sale of hydrocarbons (gas), at that time Bolivia's fiscal policy was countercyclical To the behavior of the Latin American Product (increases in fiscal expenditure in infrastructure). These antecedents, aid to the interest of the study of the coordination of the economic policy in Bolivia. The structure of a Dynamic Stochastic General Equilibrium Model (DSGE) helps us to understand the transmission channels of shocks (in Taylor rule, Phillips curve and public investment) and how the monetary and fiscal policy reacts to these shocks.Keywords. Bayesian estimation, Monetary policy, Fiscal policy, Dynamic stochastic general equilibrium model (DSGE).JEL. E42, E58, E62, E63