Central Bank Award Rodrigo Gómez

In order to honor the memory of Don Rodrigo Gómez (1897-1970), General Director of Banco de México (1952-1970), the governors of the Latin American central banks established an annual Award to promote the elaboration of studies that are of keen interest to central banks. This award has become a yardstick for research at a regional level.

It should be noted that beginning from the 2020 edition there were some changes to the call for papers. Notable among these changes is that the author or authors of the study or studies worthy of the Award or Honorable Mention automatically grant their copyright to CEMLA, in particular, to translate, edit and publish the winning research. This seeks to facilitate the publication of these articles in the Latin American Journal of Central Banking.




Winner of the 2020 Central Bank Award Rodrigo Gómez

CEMLA's Board of Governors decided to grant the 2020 Rodrigo Gómez Central Banking Award to Rogelio De La Peña Magaña for his study: "Should Monetary Policy Lean Against the Wind in a Small-Open Economy? Revisiting the Tinbergen Rule." In turn, the Governing Board recognized with honorable mentions, respectively, Luis Alejandro Rojas Bernal and Mauricio Villamizar Villegas, for their work: "Pricing the Exotic: Path-Dependent American Options with Stochastic Barriers," and Luis Simon Tamborrel for "Capital Requirements in a Model of Bank Runs: The 2008 Run on Repo." 

The article “Should Monetary Policy Lean Against the Wind in a Small-Open Economy? Revisiting the Tinbergen Rule” studies whether central banks should also respond to the build-up of financial imbalances, such as those associated with credit expansions or asset-price bubbles. The author contributes to the debate by showing a model for which targeting two policy objectives with a single instrument is more costly for a small open economy than for a closed one. To this end, he proposes a small open economy DSGE model with the Bernanke-Gertler-Gilchrist financial accelerator that features financial frictions and monopolistic competition in goods markets. He then estimates this model for Mexico. The main finding is that augmenting the Taylor rule with an argument on credit growth is not an optimal policy response; instead, the optimal policy mix consists of using two separate tools that one focuses on price and the other one on financial stability. In tandem, these instruments complement each other to stabilize the economy under financial shocks. That said, macroprudential measures may not be as useful in helping economic stability under different shocks.

Rogelio De La Peña Magaña is an economist at the Bank of Mexico, in the General Directorate of Economic Research. Luis Alejandro Rojas Bernal worked at Banco de la República (Colombia). He is currently studying his doctorate in economics. Mauricio Villamizar Villegas is the Deputy Manager of Economic Studies at Banco de la República. Luis Simón Tamborrel worked at the Banco de México before going to do his PhD in economics.

The Board of Governors thanks Oscar Arce, Chief Economist of the Bank of Spain; James C. MacGee, Chief Economist of the Bank of Canada; Carlos Urrutia, Professor and Researcher at ITAM; and Santiago García-Verdú, Advisor to CEMLA and Economist of the Bank of Mexico, for their contribution as part of the jury in this edition of the Rodrigo Gómez Award.

From their creation, in September of 1970 the award has been granted so far, to the following works:

Don Rodrigo Gómez (1897-1970)

He was a promoter of institutions. This was the first factor for explaining how he came up with founding CEMLA in 1952, then occupying a highly influential post at Banco de México. From this founding temple emerged other institutions that he helped establish. Such was the case for example of the Inter-American Development Bank which opened its doors in 1960, and many other bodies created at Banco de México aimed at fostering the country's economic progress. Through very skillful use of the public trust fund figure, during the time of Rodrigo Gómez, the Instituted Trust Funds Related to Agriculture were set up in 1954 and the Fund for Fostering Manufactured Goods Exports was created in 1960. These were followed some years later by other similar instruments for promoting social interest housing, industrial equipment and for developing areas of tourism. 

Another typical characteristic of Rodrigo Gómez was his vocation for Latin America. In honor of this characteristic, since 1958 he was assigned by the Mexican government to participate in sponsoring the Economic Commission for Latin America in work that would culminate in the creation of the Latin American Free Trade Association, LAFTA. In the specific area of central banking, the parallel idea was to create a multilateral payments system in the region. Since the corresponding work began, the Mexican representative stood out because of his intellectual capacity as well as his great dedication to encouraging economic integration among Latin American nations. He devoted himself to this ideal with great commitment, promoting it at many forums and negotiating platforms. 

The other factor explaining why Rodrigo Gómez encouraged the establishment of CEMLA was the interest he always showed in developing human resources at central banks. Being aware of the fact that the soul of these institutions mainly consists of the people who work at them and who give them their political and social dimensions, Rodrigo Gómez always paid great attention to the creation of professional teams at Banco de México. His children, as Rodrigo Gómez affectionately referred to young professionals with the highest potential, received the opportunity to study at the best universities in the country as well as abroad. Subsequently, under his careful guidance they excelled themselves in the performance of their growing responsibilities. 

CEMLA was a kind of legacy from Banco de México and Rodrigo Gómez, on an individual level, for the benefit of the central banks of Latin American countries.  It was a task that needed to be carried out with utmost diligence, improving CEMLA in order for it to become stronger and be as useful as possible. That wise and pragmatic Nuevoleonese instigator used to say that once the cart gets moving the pumpkins fall into place (things have a way of working themselves out). This commitment explains all the support CEMLA received from Banco de México, above all during its initial phase. The latter list importantly includes the help it received for obtaining its first premises and later in order for it to have its own head offices.  It is also worth mentioning the budgetary support and the willingness to allow technicians from Banco de México to collaborate in teaching and research work.