Uncovering the Portfolio Balance Channel with the use of Sovereign Credit Ratings

Borradores de Economia
Número: 
941
Publicado: 
Clasificación JEL: 
C58, E44, G11, G14
Palabras clave: 
Portfolio Balance Channel, Sovereign Credit Rating, Uncovered Interest Rate Parity, Monetary Trilemma

Lo más reciente

Francisco Javier Lasso-Valderrama, Carmiña Ofelia Vargas-Riaño
Anne Brockmeyer, Francois Gerard, Gabriel Ulyssea, Linda Wu, Marcelo Bergolo, Rodrigo Ceni González, Bernard Kirui, Andrea Lopez-Luzuriaga, Leonardo Fabio Morales, Andrea Sofía Otero-Cortés, Nadine Riedel, Matias Tapia, Tanisa Tawichsri, Verena Wiedemann
Marlon Salazar, Andrés Salazar-Mejía, Jorge Daniel Guevara-Acevedo, Juan David Duitama-Correa

In this paper we study exchange rate effects due to shifts in the portfolio composition of the Colombian financial sector during 2003-2014. We first provide a theoretical understanding of the channel's transmission mechanism by modeling how the banking