Financial Accelerator Mechanism in a Small Open Economy
Martha López (),
Juan Prada Sarmiento () and
Norberto Rodríguez Niño ()
Authors registered in the RePEc Author Service: Norberto Rodríguez ()
BORRADORES DE ECONOMIA from BANCO DE LA REPÚBLICA
Using Bayesian estimation techniques, we estimate a small open economyDSGE model with credit-market imperfections for the Colombian economy. Us-ing the estimated model we investigate what are the sources of business cycle°uctuations. We show that balance-sheet e®ects play an important role in ex-plaining recent Colombian business cycles. We then perform a counterfactualexercise that shows that ¯xed exchange rate regime could have exacerbated the¯nancial distress in the economy between 1998-1999.
Keywords: DSGE modelling; Financial Accelerator; Bayesian Estimation. (search for similar items in EconPapers)
JEL-codes: C11 C15 E32 E44 E52 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cba, nep-dge, nep-mac and nep-mon
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Working Paper: Financial Accelerator Mechanism in a Small Open Economy (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:col:000094:004992
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