Monetary Policy and Accumulation of Reserves in an Emerging Economy: A dsge Model for the Colombian Case

DOI:  https://doi.org/10.12804/revistas.urosario.edu.co/economia/a.7201
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Published: Oct 10, 2018
Issue: Vol. 21 No. 2 (2018): julio-diciembre
Section Articles


Keywords: dsge monetary policy fiscal policy economic theory

Main Article Content

Authors

Jesús Alonso Botero García
Álvaro Hurtado Rendón
Humberto Franco González
José García Guzmán

Abstract

This article presents a dynamic stochastic general equilibrium model in which we explicitly include the demand for money, the investment decisions, the role of financial intermediaries and the central bank balance sheet. The model allows the evaluation of the impact of various exogenous shocks on the economic activity and the price levels. Similarly, it allows to assess different forms of central bank intervention in the economy, either through the interest rate, or through the accumulation of international reserves. Special attention is dedicated to the basic parameters of the utility function of households (risk aversion, elasticity of labor supply and demand for money), to the proper formulation of the balance sheets of economic agents, and to the relationship between the central bank balance sheet and the money supply.

Author Biographies

Jesús Alonso Botero García

Professor and researcher of the Economic Department of University EAFIT. Integrant of the Economic and Firm Studies (GEE) research group of University EAFIT.

Álvaro Hurtado Rendón

Professor and researcher of the Economic Department of University EAFIT Integrant of the Economic and Firm Studies (GEE) research group of University EAFIT.

Humberto Franco González

Professor and researcher of the Economic Department of University EAFIT. Integrant of the Economic and Firm Studies (GEE) research group of University EAFIT.

José García Guzmán

Professor and researcher of the Economic Department of University EAFIT. Integrant of the Economic and Firm Studies (GEE) research group of University EAFIT. 

How to Cite
Botero García, J. A., Hurtado Rendón, Álvaro, Franco González, H., & García Guzmán, J. (2018). Monetary Policy and Accumulation of Reserves in an Emerging Economy: A dsge Model for the Colombian Case. Revista Economía Del Rosario, 21(2), 309–339. https://doi.org/10.12804/revistas.urosario.edu.co/economia/a.7201
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