Authors: Jose Rodney Menezes De la Cruz.

Journal: Economies (MDPI) – Q1 (CiteScore) and Q2 (JCR). 

Year: 2026

DOI: https://doi.org/10.3390/economies14040120

Abstract: This study examines how firms’ financial heterogeneity shapes the transmission of monetary policy to investment in Latin American economies. It develops an extended theoretical model with heterogeneous firms, calibrated for Latin American economies, and validates it empirically through local projection models. These projections are applied to both a dataset of 72 of the most representative firms from the six analyzed Latin American economies and simulated data from the theoretical model, enabling direct comparison of the results. The research yields three main findings. First, it shows that financial heterogeneity is crucial and determines how firms respond to a monetary shock. Firms with fragile structures or high levels of indebtedness tend to restrict investment following monetary expansions, whereas firms with stronger financial positions or greater distance to default tend to increase it. The aggregate effect depends on the distribution of financial structures in the economy and which group dominates. Second, a transmission mechanism is identified via a financial channel based on a price–quantity sequence. The drop in the real rate compresses spreads and raises the price of capital; if financial constraints are active, the monetary relief is used to repair balance sheets rather than to invest; otherwise, the stimulus quickly translates into investment. Finally, the study shows that ignoring heterogeneity—as in representative–agent models—leads to a significant overestimation of both the magnitude and persistence of investment responses to monetary policy shocks.

Authors: Jose Rodney Menezes De la Cruz.

Journal: SSRN - Working Paper

Year: 2026

DOI: https://dx.doi.org/10.2139/ssrn.6150386 

Abstract: The relationship between stock market development and economic growth remains the subject of considerable debate, with growing empirical evidence yielding ambiguous results. This study challenges the conventional narrative of a positive and universal link between the stock market and economic growth by addressing a key limitation in the literature: the implicit assumption of homogeneity in multi-country analyses. To this end, I employ a Bayesian Vector Autoregressive (BVAR) framework estimated individually for a global panel of 93 economies from 1996 to 2024, allowing for the explicit modeling of idiosyncratic structural dynamics. The findings do not reveal a systematic or statistically significant effect of stock market shocks on economic growth. The dominant result is immense heterogeneity, where the null average effect masks a wide dispersion of positive, negative, and neutral responses at the country level. Moreover, the forecast error variance decomposition consistently shows that external factors, particularly shocks to the real exchange rate, are the main drivers of economic growth variability. The study concludes that the finance-growth nexus is not universal, but is heterogeneous and highly contingent upon the idiosyncratic characteristics of each country.

Authors: Jose Rodney Menezes De la Cruz.

Journal: Journal of Research in Financial Models.

Year: 2025

DOI: https://doi.org/10.56503/rimf/Vol.1(2025)/3308 

Abstract: This article analyzes the dynamics of economic growth in Latin American countries in response to oil price shocks under different fiscal rules, using the calibration of a theoretical neoclassical growth model. Our findings indicate that an increase in oil prices has a positive impact on the growth rates of Gross Domestic Income (GDI) and Gross Domestic Product (GDP), regardless of the fiscal rule applied. Fiscal rules incorporating Hartwick's rule appear to be the most effective in smoothing the impacts of these shocks, due to their emphasis on investment as a buffering mechanism for the economy's productive capacity. In contrast, a structural surplus fiscal rule has the most significant positive impacts on long-term economic growth. We also observe that the magnitude of the impact on growth rates depends significantly on the structural characteristics of each country. Lastly, our results suggest a convergence in growth rates among Latin American countries.

Authors: Jose Rodney Menezes De la Cruz.

Journal: Journal of Research in Financial Models. 

Year: 2024

DOI: https://doi.org/10.56503/rimf/Vol.2(2024)/3183 

Abstract: This research examines the effect of the development of the stock market on economic growth in Peru between 2003 and 2024, using a hierarchical Bayesian Vector Autoregressive (BVAR) model. It analyzes and explores the dynamic interactions between macroeconomic variables and financial variables in the stock market. The results indicate that shocks to the General Index of the Lima Stock Exchange generate a positive, though limited and transitory, impact on economic growth and investment. Likewise, equity and fixed-income transactions exert a positive influence on consumption and financial stability, respectively, albeit with lesser magnitude. This analysis highlights the importance of the stock market for Peru’s economic growth but also points out that its effects are limited, emphasizing the need for further structural development of the financial system to achieve greater and more persistent effects on economic growth.

Authors:  Jose Rodney Menezes De la Cruz

Journal: National University of the Peruvian Amazon. 

Year: 2024

DOI: https://hdl.handle.net/20.500.12737/10689 

Abstract: ‎This research examines the distributive effects of monetary policy on the Peruvian economy, using a Dynamic Stochastic General Equilibrium (DSGE) model with heterogeneous agents, calibrated and estimated through Bayesian techniques. The study focuses on analyzing how monetary policy shocks affect the distribution of income, consumption, and wealth among formal and informal households, incorporating the heterogeneity of economic agents and assessing the aggressiveness of monetary interventions. The results show that monetary policy has significant redistributive effects in the Peruvian economy, although these effects are predominantly transitory, with inequality measures returning to their stationary states in the medium term. The main hypothesis that monetary policy shocks significantly impact economic distribution is validated, and it is observed that the aggressiveness of monetary policy modulates the magnitude and speed of convergence towards equilibrium. This research contributes to the growing body of literature that recognizes the importance of considering the heterogeneity of agents and the distributive consequences of macroeconomic policies, especially in economies with high levels of heterogeneity like Peru and emerging economies.

Authors: Jose Rodney Menezes De la Cruz; Mario Andre Lopez Rojas; Fritz Gian Pierre Alva Da Silva.

Journal: Universidad del Pacifico - Libro: “Economía y desarrollo en las regiones del Perú: brechas y oportunidades”. 

Year: 2019

DOI: https://hdl.handle.net/11354/6281 

Abstract: Using a Bayesian dynamic factor model and mixed-frequency economic series, a tool is developed to estimate the unobserved latent quarterly economic activity of Loreto. This approach also enables early projections ahead of the official publication of the region's annual Gross Value Added. The results show that the economic activity indicator aligns with both regional and national economic performance. Furthermore, it is demonstrated that the forecasts of Loreto's Gross Value Added have a high level of accuracy, with predictions deviating on average by only 1.5% (based on the root mean square error - RMSE) from the actual data.