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Transmission Mechanism and Inflation Targeting: The Case of Colombia's Desinflation Author info | Abstract | Publisher info | Download info | Related research | Statistics Javier Gómez () (Banco de la República)
Juan Manuel Julio () (Banco de la República)
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Colombia has been on a steady disinflation path since the early 1990s. In this paper, we model the transmission mechanism of monetary policy during this disinflation. We describe how inflation evolves in response to important shocks that occurred during disinflation such as the terms of trade and to the risk premium, comparing the responses across different assumptions about inflation persistence. Disinflation itself is captured by a permanent shift to the inflation target. We evaluate to what extent a shift towards more forward-looking wage and price-setting mechanisms would determine the sacrifice ratio under disinflation.
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Article provided by Ilades-Georgetown University, Economics Department in its journal Revista de Analisis Economico .
Volume (Year): 18 (2003)
Issue (Month): 2 (December)
Pages: 109-133
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Handle: RePEc:ila:anaeco:v:18:y:2003:i:2:p:109-133Contact details of provider: Postal: Erasmo Escala 1835, 6500620 Santiago Phone: (562) 692-0265 Fax: (562) 692-0303 Email: Web page: http://www.economia.uahurtado.cl/ More information through EDIRC
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Keywords: transmission Mechanism of monetary policy Inflation Targeting Other versions of this item:
Find related papers by JEL classification: E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
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Miguel Urrutia, 2002.
"UNA VISIÓN ALTERNATIVA: La Política Monetaria y Cambiaria en la Última Década ,"
BORRADORES DE ECONOMIA
003731, BANCO DE LA REPÚBLICA.
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