Evolution of central government debt instruments around the world 1995 – 2021
Government borrowing could respond to intertemporal allocation of public resources to smooth expenditure, investment, and taxation. It allows expediting the investment process to foster economic growth and helps in economic stabilization. According to Eichengreen et al. (2019), sovereign debt has a long history with evolving nature and dynamics. Debt before the 19th century was mainlyContinue reading “Evolution of central government debt instruments around the world 1995 – 2021”
How did net creditor and net debtor countries perform between 2019 and 2021?
The net international investment position (NIIP) provides an aggregate view of the net financial position (assets minus liabilities) of a country vis-à-vis the rest of the world. During the 2019 – 2021 period, NIIP has exhibited important changes with many of the main net creditors (as Japan, Germany, Hong Kong, Norway, Singapore, Netherlands, Switzerland, and Canada)Continue reading “How did net creditor and net debtor countries perform between 2019 and 2021?”
The Financial Accelerator Mechanism Redux
Ben Bernanke, together with Mark Gertler, has advocated to study the importance of financial factors in economic allocations. In particular, the misallocations created by asymmetric information. In their American Economic Review (1989) paper (https://lnkd.in/gF3r6zq7) titled Agency Costs, Net Worth and Business Fluctuations, they introduced the financial accelerator mechanism through which small shocks get amplified dueContinue reading “The Financial Accelerator Mechanism Redux”
High inflation and relatively low interest rates around the world
These levels are, on average, 6% higher than the levels observed in 2019. Production and distribution disruptions are part of the supply side considerations behind the global surge of inflation. However, demand side factors, as the strong fiscal stimulus implemented to counteract the negative effects of COVID-19, and low interest rates, are also part ofContinue reading “High inflation and relatively low interest rates around the world”
Public consumer credit
Credit markets are prone to information asymmetries, which could cause inefficiencies such as credit rationing and exclusion. In general, private institutions could have advantages to find solutions to overcome these information problems. In some cases, due to the nature of the information problem or of the legal and regulatory framework, a carefully designed and operatedContinue reading “Public consumer credit”
Monetary and Fiscal Policies Interactions in Mexico
In this project, we analyze the role of fiscal and monetary policies in the determination of inflation and government debt in Mexico during the 1981-2016 period. We identify five different periods of fiscal and monetary policy interactions, which are congruent with a historical account of the Mexican monetary and fiscal policy mix. Counterfactual exercises showContinue reading “Monetary and Fiscal Policies Interactions in Mexico”
What was the role played by the inflation formation processes, monetary policy, and shocks volatilities in the inflation dynamics of Brazil, Chile, Colombia, Mexico, and Peru?
In this presentation (https://lnkd.in/gupfXu85) we analyze the role played by monetary policies, inflation determinants, and shocks. We allow for endogenous structural breaks and classify regimes according to (1) the relative weight of inflation in an interest rate reaction function, which measures the Central Bank’s commitment to fight inflation, (2) the relative slope of the PhillipsContinue reading “What was the role played by the inflation formation processes, monetary policy, and shocks volatilities in the inflation dynamics of Brazil, Chile, Colombia, Mexico, and Peru?”
Why bonds’ prices drop when interest rates increases? and why longer tenor’s bonds have larger drops in prices?
The price of a bond, which gives the owner rights over future cash flows, should be equal to the present discounted value of those cash flows. The interest rates that guarantees the equality of cash flows and price of bonds is defined as the yield rate. Bonds’ prices and yield rates are inversely related. WhenContinue reading “Why bonds’ prices drop when interest rates increases? and why longer tenor’s bonds have larger drops in prices?”
Financial conditions and monetary policy: the importance of non-linear effects
In this research project (https://lnkd.in/dDqXRN25), we show the importance of considering non-linearities when analyzing financial conditions and the macroeconomic-financial linkages. Conclusions include:
Measuring corruption
Measuring corruption is challenging because participants have incentives to hide it. According to the United Nations, annual costs from corruption are estimated at 5% of Gross Domestic Product (GDP). The IMF (2016) estimates that the annual cost of bribery is 2% of GDP and according to IMF (2019) corruption reduces tax income in at leastContinue reading “Measuring corruption”
Alberto Ortiz Bolaños 