Government-driven credit played an important role in countervailing the private credit crunch in Brazil during the recent financial crisis. However, government credit concessions continued to expand after the economy recovered. This paper investigates some important features of this expansion...

This paper explores the impact of international financial integration on credit markets in Latin America, using a cross-country dataset covering 17 countries between 1996 and 2008. It is found that financial integration amplifies the impact of international financial shocks on aggregate credit...

The literature on optimal monetary policy in New Keynesian models under both commitment and discretion usually solves for the optimal allocations that are consistent with a rational expectations market equilibrium, but it does not study whether the policy can be implemented given the available...

For women microentrepreneurs, access to financial services matters. It is critical to their ability to make productive investments in their businesses. As part of IDB's efforts to strengthen women's roles in economic development, the Women in Development Unit undertook a study to analyze the...

Government-owned development banks have often been justified by the need to respond to financial market imperfections that hinder the establishment and growth of promising businesses, and as a result, stifle economic development more generally. However, evidence on the effectiveness of these...

Microfinance institutions (MFIs) have been successful in providing credit to millions of low-income borrowers in groups previously excluded from formal financial services, but they often charge interest rates that many claim are excessive. We examine microfinance interest rates and their...

Motivated by the recent experience of the U.S. and the Eurozone, the authors describe the quantitative properties of a New Keynesian model with a zero lower bound (ZLB) on nominal interest rates, explicitly accounting for the nonlinearities that the bound brings. Besides showing how such a model...

For women microentrepreneurs, access to financial services matters. It is critical to their ability to make productive investments in their businesses. As part of IDB's efforts to strengthen women's roles in economic development, the Women in Development Unit undertook a study to analyze the...

After decades using monetary aggregates as the main instrument of monetary policy and having different varieties of crawling peg exchange rate regimes, Colombia adopted a full-fledged inflation-targeting (IT) regime in 1999, with inflation as the nominal anchor, a floating exchange rate, and the...

This paper provides an overview of the reserve requirement measures undertaken by the Central Bank of Peru. It provides a rationale for the use of these instruments as well as empirical evidence of their effectiveness. In general, the results show that tightening reserve requirements has the...