TY - JOUR
T1 - Inflation before and after central bank independence
T2 - The case of Colombia
AU - Otero, Jesús
AU - Ramírez, Manuel
N1 - Funding Information:
We would like to thank Ana María Iregui, Marta Misas and Lina Sarmiento for help in obtaining data. We are indebted to Luis Eduardo Fajardo, Juan Carlos Guataquí, and the members of the Board of Directors of the Banco de la República (Central Bank of Colombia) for useful discussions on several of the ideas developed in the paper. We also wish to thank seminar participants at the Banco de la República, the Latin American Meeting of the Econometric Society (São Paulo, Brazil) and two anonymous referees for their valuable comments and suggestions. Financial support from the Banco de la República is gratefully acknowledged. The views expressed in the paper are the responsibility of the authors, and should not be interpreted as reflecting those of the Board of Directors of the Banco de la República, or other members of its staff. Any remaining errors are ours.
Copyright:
Copyright 2008 Elsevier B.V., All rights reserved.
PY - 2006/2
Y1 - 2006/2
N2 - In this paper we model the Colombian inflation rate in terms of excess demand effects from asset, goods and factor markets. In contrast to previous results for a group of industrial economies, we find that domestic factors are a far more powerful influence on inflation than are external factors. The paper pays particular attention to the potential effects of the Constitutional Reform of 1991, which created a Central Bank independent from other parts of government. We find that the creation of an independent Central Bank did change some of the parameters of the model, as the disequilibria in goods and monetary markets were found to have a smaller effect on inflation after Central Bank independence was granted.
AB - In this paper we model the Colombian inflation rate in terms of excess demand effects from asset, goods and factor markets. In contrast to previous results for a group of industrial economies, we find that domestic factors are a far more powerful influence on inflation than are external factors. The paper pays particular attention to the potential effects of the Constitutional Reform of 1991, which created a Central Bank independent from other parts of government. We find that the creation of an independent Central Bank did change some of the parameters of the model, as the disequilibria in goods and monetary markets were found to have a smaller effect on inflation after Central Bank independence was granted.
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U2 - 10.1016/j.jdeveco.2004.12.005
DO - 10.1016/j.jdeveco.2004.12.005
M3 - Article
AN - SCOPUS:28944454518
SN - 0304-3878
VL - 79
SP - 168
EP - 182
JO - Journal of Development Economics
JF - Journal of Development Economics
IS - 1
ER -