Credit and saving constraints in general equilibrium: A quantitative exploration

In this paper we build an incomplete-markets model with heterogeneous households and firms to study the aggregate effects of saving constraints and credit constraints in general equilibrium. We calibrate the model using survey data from Colombia, a developing country in which informal saving and credit frictions are pervasive. Our quantitative results suggest that reducing savings […]

Financial inclusion and business practices of microbusiness in Colombia

Financial inclusion is known to be relevant for improving the growth perspectives of microbusinesses. This research has three aims. First, to explore how adopting business practices can impact the usage of financial products and services of these firms. Second, to determine if higher levels of microbusinesses’ formalization mediate the impact. Third, to establish if there […]

The Effects of Formal Financial Inclusion on Informal Credit Use: Evidence from Colombia.

It is well known that formal credit can improve household’s wellbeing in developing countries, however, its relationship to informal credit as a substitute or complement is uncertain. This study aims to estimate the causal effect of formal credit on the use of informal credit sources using a Regression Discontinuity Designs which exploits credit allocation rules […]

Financial inclusion and its heterogeneous effect on household income

This paper examines how, in the main Colombian cities, the effect of financial inclusion (FI) on income changes along the distribution of household income considering labor informality. We construct a multidimensional FI indicator based on the World Bank definition and on the data. Using a quantile regression technique, we estimate the effect of FI on […]