dc.creator	Echeverry-Garzón, Juan Carlos
dc.date.created	1996-10-10
dc.date.issued	1996-10-10
dc.identifier.uri	https://repositorio.banrep.gov.co/handle/20.500.12134/5077
dc.description.abstract	This After 1991 Colombia witnessed a sharp fall in the national savings rate (see figure 1.1), and in particular that of the private sector. Two hypotheses have been advanced for explaining this behavior. The first one stresses consumption smoothing within the Perrnanent Income Hypothesis framework (PIH). The reasons for such smoothing can be related with three major phenomena that characterized this period; namely, i. Since 1990 the government pursued an "apertura" (opening), consisting of tariff reductions, which the agents may have deemed as non-credible (transitory); hence, they exploited the advantage of purchasing imported goods at current low prices, expecting future rises in tariffs. ii. The agents believed in the apertura, but an overshooting of capital inflows led to an overvalued exchange rate, which, they expected, should be corrected at some point in the near future, with similar effects on current imports consumption. A similar effect on the real interest rate has been also claimed to have similar effects on total consumption (see Lopes et al, 1996). And iii. a predictable increase in income originated in fairly secure and substancial oil exports starting in 1997; this could lead oil exports revenues from $ 1.4 bn. yearly in 1991 (approximately 42% of total exports), to $ 4bn. after 1997. Such expected rise in income would have caused the observed increase in consumption. The second hypothesis is based on the relaxation of liquidity constraints (LCH), as a result of the capital inflows. Urrutia and Lopez (1994) argue that the increase in consumption was due to a relaxation in the liquidity constraints binding on an important share of the population (75% according to them). The inflow of capital experienced in the first years of the 1990s, and the monetary policy of that period would have allowed an increase in outstanding loans directed to consumption purposes. Cárdenas (1996) and Sánchez (1996) also present evidence in support of this hypoth.
dc.format.mimetype	PDF
dc.language.iso	spa
dc.publisher	Banco de la República
dc.relation.ispartof	Documentos de Trabajo
dc.relation.ispartofseries	Borradores de Economía
dc.relation.isversionof	Borradores de Economía; No. 61
dc.rights.accessRights	Open Access
dc.rights.uri	https://creativecommons.org/licenses/by-nc-sa/4.0/
dc.title	The fall in Colombian savings during the 1990s: theory and evidence
dc.type	Working Paper
dc.subject.jel	E58 - Central Banks and Their Policies
dc.subject.jel	E52 - Monetary Policy
dc.subject.jel	E21 - Consumption; Saving; Wealth
dc.subject.keyword	Fall
dc.subject.keyword	Colombia
dc.subject.lemb	Ahorro e inversión -- Colombia -- 1990-2000
dc.subject.lemb	Consumo (Economía) -- Colombia -- 1990-2000
dc.type.spa	Documentos de trabajo
dc.rights.spa	Acceso abierto
dc.rights.cc	Atribucion-NoComercial-CompartirIgual CC BY-NC-SA 4.0
dc.subject.jelspa	E58 - Bancos centrales y sus políticas
dc.subject.jelspa	E52 - Política monetaria
dc.subject.jelspa	E21 - Consumo; Ahorro; Riqueza
dc.type.hasversion	Published Version
dc.coverage.sucursal	Bogotá
dc.relation.doi	https://doi.org/10.32468/be.61
dc.rights.disclaimer	Las opiniones contenidas en el presente documento son responsabilidad exclusiva de los autores y no comprometen al Banco de la República ni a su Junta Directiva.
dc.relation.repec	https://ideas.repec.org/p/bdr/borrec/061.html
dc.identifier.handle	https://hdl.handle.net/20.500.12134/5077
dc.source.handleRepec	RePEc:bdr:borrec:061

The fall in Colombian savings during the 1990s: theory and evidence

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