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Sectoral Balance Sheet Mismatches and Macroeconomic Vulnerabilities in Colombia, 1996-2003

Author

Listed:
  • Juan Manuel Lima
  • Johannes Wiegand
  • Enrique Montes
  • Carlos Varela

Abstract

We employ an extended version of the Allen et al. (2002) Balance Sheet Approach to examine macroeconomic vulnerabilities in Colombia between 1996 and 2003, based on an unusually rich data set. We find that vulnerabilities existing prior to Colombia's 1999 recession-high levels of private debt, a large negative foreign currency position of the corporate sector, and banks' exposure to stretched households and companies-receded subsequently. New vulnerabilities emerged, however, especially the high level of public debt accumulated until end-2003, and growing exposure of the financial sector to the sovereign.

Suggested Citation

  • Juan Manuel Lima & Johannes Wiegand & Enrique Montes & Carlos Varela, 2006. "Sectoral Balance Sheet Mismatches and Macroeconomic Vulnerabilities in Colombia, 1996-2003," IMF Working Papers 06/5, International Monetary Fund.
  • Handle: RePEc:imf:imfwpa:06/5
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    References listed on IDEAS

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    1. Brad Setser & Ioannis Halikias & Alexander Pitt & Christoph B. Rosenberg & Brett E. House & Jens Nystedt & Christian Keller, 2005. "Debt-Related Vulnerabilities and Financial Crises," IMF Occasional Papers 240, International Monetary Fund.
    2. Philip R. Gerson & George A Mackenzie & Peter S. Heller & Alfredo Cuevas, 2001. "Pension Reform and the Fiscal Policy Stance," IMF Working Papers 01/214, International Monetary Fund.
    3. José Darío Uribe & Hernando Vargas, 2002. "Financial Reform, Crisis and Consolidation in Colombia," Borradores de Economia 204, Banco de la Republica de Colombia.
    4. Brad Setser & Nouriel Roubini & Christian Keller & Mark Allen & Christoph B. Rosenberg, 2002. "A Balance Sheet Approach to Financial Crisis," IMF Working Papers 02/210, International Monetary Fund.
    5. Echeverry, Juan Carlos & Fergusson, Leopoldo & Steiner, Roberto & Aguilar, Camila, 2003. "'Dollar' debt in Colombian firms: are sinners punished during devaluations?," Emerging Markets Review, Elsevier, vol. 4(4), pages 417-449, December.
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    Cited by:

    1. International Monetary Fund, 2006. "Colombia; Selected Issues," IMF Staff Country Reports 06/401, International Monetary Fund.
    2. Li, Cheng, 2017. "China’s Household Balance Sheet: Accounting Issues, Wealth Accumulation, and Risk Diagnosis," MPRA Paper 79838, University Library of Munich, Germany.
    3. Serge Jeanneau & Camilo E Tovar, 2008. "Financial stability implications of local currency bond markets: an overview of the risks," BIS Papers chapters,in: Bank for International Settlements (ed.), New financing trends in Latin America: a bumpy road towards stability, volume 36, pages 65-87 Bank for International Settlements.
    4. Johan Mathisen & Anthony Pellechio, 2007. "Using the balance sheet approach in surveillance: framework, data sources, and data availability," IFC Bulletins chapters,in: Bank for International Settlements (ed.), Proceedings of the IFC Conference on "Measuring the financial position of the household sector", Basel, 30-31 August 2006 - Volume 1, volume 25, pages 7-44 Bank for International Settlements.
    5. International Monetary Fund, 2009. "Peru; Selected Issues," IMF Staff Country Reports 09/41, International Monetary Fund.

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