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Financial Inefficiency And Real Business Cycle In Colombia


  • Camilo Zea



In a dynamic, stochastic, general equilibrium model, we explore the optimal response of the inhabitants of a closed economy to an inefficient ad hoc financial system that in its intermediation duty looses a fraction of agrégate savings which otherwise would become agrégate investment. The incidente over the cycle of shocks to average financial inefficiency and technology is analyzed, as well as the steady state welfare gain of a reduction in average financial inefficiency. The descriptive power of the model is assessed with Colombian data between 1970 and 1992. The results in the paper suggest that the model!s predictions are largely consistent with aggregate behaviour of the Colombian economy, making it possible to explore several issues of financial liberalization and deepening.

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  • Camilo Zea, 1999. "Financial Inefficiency And Real Business Cycle In Colombia," BORRADORES DE ECONOMIA 002722, BANCO DE LA REPÚBLICA.
  • Handle: RePEc:col:000094:002722

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    1. Rodrigo Suescún M. & Martha Misas, 1996. "Cambio Tecnológico, Ineficiencia de Escala e Ineficiencia X en la Banca Colombiana," Borradores de Economia 059, Banco de la Republica de Colombia.
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    3. Rodrigo Suescún M., 1997. "Commodity booms,dutch disease,and real business cycles in a small open economy: The case of coffee in Colombia," BORRADORES DE ECONOMIA 002164, BANCO DE LA REPÚBLICA.
    4. Adriana Ferrufino Echeverri, 1991. "Reestimación Y Ampliación De La Evidencia Sobre Las Economías De Escala En El Sistema Financiero Colombiano," ENSAYOS SOBRE POLÍTICA ECONÓMICA, BANCO DE LA REPÚBLICA - ESPE, vol. 10(19), pages 69-96, June.
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    6. Hernando Vargas H., 1996. "Apertura, encajes e intermediación financiera," Ensayos sobre Política Económica, Banco de la Republica de Colombia, vol. 15(30), pages 5-40, DIciembre.
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    8. Franz Hamann S. & Alvaro Riascos, 1998. "Ciclos Económicos en una Economía Pequeña y Abierta - Una Aplicación para Colombia," BORRADORES DE ECONOMIA 002122, BANCO DE LA REPÚBLICA.
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    10. Santiago Herrera & Olver Bernal, 1983. "Producción, costos y economías de escala en el sistema bancario colombiano," ENSAYOS SOBRE POLÍTICA ECONÓMICA, BANCO DE LA REPÚBLICA - ESPE, vol. 2(3), pages 7-36, April.
    11. Masao Ogaki & Jonathan D. Ostry & Carmen M. Reinhart, 1996. "Saving Behavior in Low- and Middle-Income Developing Countries: A Comparison," IMF Staff Papers, Palgrave Macmillan, vol. 43(1), pages 38-71, March.
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    13. V. V. Chari & Larry E. Jones & Rodolfo E. Manuelli, 1996. "Inflation, growth, and financial intermediation," Review, Federal Reserve Bank of St. Louis, issue May, pages 41-58.
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    15. Pagano, Marco, 1993. "Financial markets and growth: An overview," European Economic Review, Elsevier, vol. 37(2-3), pages 613-622, April.
    16. Javier Guillermo Gómez, 1992. "Una nota sobre el costo de las fluctuaciones económicas," Ensayos sobre Política Económica, Banco de la Republica de Colombia, vol. 11(21), pages 191-208, Junio.
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