Three Essays on the Monetary Policy in Mexico



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Along this dissertation, I carry out a broad analysis of monetary policy in Mexico during the last two decades. Specifically, I investigate the impact of a contractionary monetary policy on bank credit to the private sector, as well as on regional and sectoral economic activity. In very general terms, I find that following a monetary tightening, firms bank loans tend to increase, which is considered a perverse reaction of bank credit or the “loan puzzle”. Furthermore, I find that, in the Mexican southern region, a region with the lowest integration with the financial sector, economic activity does not respond following a monetary tightening. In co-authorship with Dr. Victor Valcarcel, we produce the first Divisia Index for the Money Supply in Mexico. By using such index, we aggregate the different monetary assets, weighting by their differences in liquidity degrees.



Monetary policy -- Mexico, Bank loans, Economics