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Credit bubble and stagnation in Colombia, 1990-2001

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  • Fernando Tenjo
  • Enrique Lopez

    ()

    (Banco de la Republica
    Banco de la Republica)

Abstract

This paper explores the dynamics of the credit-crunch affecting Colombia during the second half of the 1990s. Its main objectives are to present statistical evidence regarding the phenomenon in question, to ascertain rhythms deriving from it and some working hypotheses shedding some light on determinants of Colombian credit market behaviour. The study distinguishes between exogenous and endogenous factors explaining this behaviour. External capital flows play a key role in the former as their size and direction highly influence internal credit conditions and economic activity. However, changes in these flows are channelled through a domestic financial system that amplifies their negative effect on the economy, thus playing a procedural-cyclical role

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File URL: http://www.fce.unal.edu.co/cej/number1/6-Tenjo.pdf
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Article provided by Academia Colombiana de Ciencias Economicas, Colegio Mayor de Nuestra Senora del Rosario, Pontificia Universidad Javeriana, Universidad de Antioquia, Universidad de los Andes, Universidad del Valle, Universidad Externado de Colombia, Universidad Nacional de Colombia in its journal Colombian Economic Journal.

Volume (Year): 1 (2003)
Issue (Month): 1 (December)
Pages: 151-191

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Handle: RePEc:cej:primer:v:1:y:2003:i:1:p:151-191
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Keywords: credit markets; credit cycle; financial structure; flow of funds;

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Find related papers by JEL classification:
  • E4 - Macroeconomics and Monetary Economics - - Money and Interest Rates
  • G1 - Financial Economics - - General Financial Markets
  • G3 - Financial Economics - - Corporate Finance and Governance

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  1. Kaminsky, Graciela & Lizondo, Saul & Reinhart, Carmen M., 1997. "Leading indicators of currency crises," Policy Research Working Paper Series 1852, The World Bank.
  2. Aghion, Philippe & Bacchetta, Philippe & Banerjee, Abhijit, 1999. "Capital Markets and the Instability of Open Economies," CEPR Discussion Papers 2083, C.E.P.R. Discussion Papers.
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  5. Frederic S. Mishkin, 2001. "Prudential Supervision: Why Is It Important and What Are the Issues?," NBER Chapters, in: Prudential Supervision: What Works and What Doesn't, pages 1-30 National Bureau of Economic Research, Inc.
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  7. Paul Krugman, 1999. "Balance Sheets, the Transfer Problem, and Financial Crises," International Tax and Public Finance, Springer, vol. 6(4), pages 459-472, November.
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  12. Aghion, Philippe & Bacchetta, Philippe & Banerjee, Abhijit, 2001. "A Corporate Balance Sheet Approach to Currency Crises," CEPR Discussion Papers 3092, C.E.P.R. Discussion Papers.
  13. Aghion, Philippe & Bacchetta, Philippe & Banerjee, Abhijit, 2000. "Currency Crises and Monetary Policy in an Economy with Credit Constraints," CEPR Discussion Papers 2529, C.E.P.R. Discussion Papers.
  14. Blinder, Alan S, 1987. "Credit Rationing and Effective Supply Failures," Economic Journal, Royal Economic Society, vol. 97(386), pages 327-52, June.
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  16. Michel Aglietta, 1993. "Crises et cycles financiers : une approche comparative," Revue d'Économie Financière, Programme National Persée, vol. 26(3), pages 5-50.
  17. Bernanke, Ben S. & Gertler, Mark & Gilchrist, Simon, 1999. "The financial accelerator in a quantitative business cycle framework," Handbook of Macroeconomics, in: J. B. Taylor & M. Woodford (ed.), Handbook of Macroeconomics, edition 1, volume 1, chapter 21, pages 1341-1393 Elsevier.
  18. Fama, Eugene F., 1980. "Banking in the theory of finance," Journal of Monetary Economics, Elsevier, vol. 6(1), pages 39-57, January.
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Cited by:

  1. Sergio Clavijo & Michel Janna & Santiago Munoz, 2005. "The Housing Market in Colombia: Socioeconomic and Financial Determinants," Research Department Publications 4389, Inter-American Development Bank, Research Department.
  2. Sergio Clavijo & Michel Janna & Santiago Munoz, 2005. "El mercado colombiano de la vivienda: factores socioeconómicos y financieros determinantes," Research Department Publications 4390, Inter-American Development Bank, Research Department.
  3. Boris Branisa & Adriana Cardozo, 2009. "Revisiting the Regional Growth Convergence Debate in Colombia Using Income Indicators," Ibero America Institute for Econ. Research (IAI) Discussion Papers 194, Ibero-America Institute for Economic Research, revised 21 Aug 2009.

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