Inflation before and after central bank independence: The case of Colombia

Jesús Otero, Manuel Ramírez

Research output: Contribution to journalArticlepeer-review

8 Scopus citations


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.

Original languageEnglish (US)
Pages (from-to)168-182
Number of pages15
JournalJournal of Development Economics
Issue number1
StatePublished - Feb 2006

All Science Journal Classification (ASJC) codes

  • Development
  • Economics and Econometrics


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