We explore the effectiveness of capital controls in Colombia. We analyze the impact of administrative restrictions to capital flows on aggregate capital flows, the composition of capital flows, the real exchange rate, and economic activity using restricted versions of vector error correction...

A model of imperfect credibility, in the spirit of Bertola and Svensson, is derived and estimated using Colombian data. The main feature of the model is that central-parity depreciation expectations are endogenous with respect to the position of the exchange rate inside the target zone. (DSE/DÜI)