Monetary and Fiscal Policy Options for Dealing with External Shocks
AbstractThis paper utilizes an open-economy New Keynesian overlapping generations model, the Global Integrated Monetary and Fiscal Model (GIMF), to assess the macroeconomic effects of external shocks and the impact of various monetary and fiscal policy responses. The simulations assess the effect of shocks to trade, world income, and risk premia for public debt. The results suggest that under Colombiaâ€™s inflation targeting regime, which incorporates exchange rate flexibility and a highly responsive monetary policy, the economy is well poised to adjust to different external shocks. They also suggest that the potential role of fiscal policy in responding to shocks depends critically on financing conditions.
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Bibliographic InfoPaper provided by International Monetary Fund in its series IMF Working Papers with number 09/59.
Date of creation: 01 Mar 2009
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This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-05-02 (All new papers)
- NEP-CBA-2009-05-02 (Central Banking)
- NEP-DGE-2009-05-02 (Dynamic General Equilibrium)
- NEP-MAC-2009-05-02 (Macroeconomics)
- NEP-MON-2009-05-02 (Monetary Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Javier Gómez & José Darío Uribe & Hernando Vargas, 2002. "The Implementation Of Inflation Targeting In Colombia," BORRADORES DE ECONOMIA 003603, BANCO DE LA REPÚBLICA.
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IMF Working Papers
07/202, International Monetary Fund.
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- PÃ¤r Ã–sterholm & Lisandro Abrego, 2008. "External Linkages and Economic Growth in Colombia," IMF Working Papers 08/46, International Monetary Fund.
- Cheikh Tidiane Ndiaye & Mamadou Abdoulaye Konte, 2012. "Politiques macroéconomiques et stabilisation des chocs dans la zone UEMOA," Working Papers halshs-00830595, HAL.
- Ramiro Rodríguez Revilla, 2011. "Modelos de equilibrio general dinámicos y estocásticos para Colombia 1995-2011," REVISTA ECOS DE ECONOMÍA, UNIVERSIDAD EAFIT.
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