TY  - BOOK
AU  - Barreto Vargas,Carlos Leonardo
TI  - Nonconventional monetary policy in a regime-switching model with endogenous financial crises
T2  - Documentos CEDE
SN  - 1657-5334
U1  - 332.46 
PY  - 2018///
CY  - Bogotá
PB  - Universidad de los Andes, Facultad de Economía, CEDE
KW  - Política monetaria
KW  - Colombia
KW  - Crisis financiera
KW  - Inflación objetivo
N1  - Incluye referencias bibliográficas
N2  - This paper develops a regime-switching newkeynesian model for a small open economy, with an occasionally binding financial friction that allows for endogenous financial crises. The model has two regimes: a regime for normal economic times, in which financial market access is unconstrained, and a crisis regime, characterized by curtailed access to foreign borrowing. The transition probability between regimes depends on the endogenous variables of the model. We employ this framework to analyze the macroeconomic implications of adapting the Inflation Targeting (IT) strategy in a way that takes into account the possibility to prevent the occurrence of financial crises. We calibrate the model using Colombian historical data. The results show that monetary policy has major limitations when it seeks to prevent financial crises. As the central bank gives more importance to the GDP growth gap, the frequency with which crises occur decreases. However, this reduction is quantitatively small
UR  - https://economia.uniandes.edu.co/components/com_booklibrary/ebooks/dcede2018-34.pdf
ER  -