IDEAS home Printed from
MyIDEAS: Login to save this paper or follow this series

Assessing Inflationary Pressures in Colombia

  • Hernando Vargas


  • Andrés González


  • Eliana González


  • Jose Vicente Romero


  • Luis Eduardo Rojas


The assessment of inflationary pressures in Colombia has faced two important challenges in the present decade. The first one occurred in 2006 and consisted of detecting an overheating economy in the midst of fast growing investment and increasing measured productivity. The second challenge took place in 2007-2008, when the economy was hit by a number of "supply" shocks and core inflation indicators sent diverging signals about the transmission of those shocks to macroeconomic inflation. An evaluation of the first episode shows that traditional indicators of productivity and unit labor costs were not sufficient to identify "supply" and "demand" movements. Thus, policymakers had to rely on a wider array of variables to gauge the state of the economy. Regarding the second episode, an evaluation of core inflation indicators according to standard criteria suggests that no particular measure seems to be clearly superior to the others. Hence, the assessment of inflationary pressures should not rely only on one or few core inflation indicators, since some signals could be picked by some measures and not by others. Moreover, this result suggests that the analysis of core inflation measures must be complemented with a careful examination of the persistence of the shocks and a close monitoring of their impact on inflation expectations. It is found that the latter are formed on the basis of past inflation, but that the inflation target also plays a role. In addition, inflation expectations partially move with "supply" shocks, an outcome that reflects a degree of credibility of monetary policy.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL:
Download Restriction: no

Paper provided by Banco de la Republica de Colombia in its series Borradores de Economia with number 558.

in new window

Date of creation:
Date of revision:
Handle: RePEc:bdr:borrec:558
Contact details of provider: Postal: Cra 7 # 14-78 Piso 7
Phone: (57-1) 3431111
Fax: (57-1) 2841686
Web page:

More information through EDIRC

References listed on IDEAS
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.:

as in new window
  1. Andrés González G. & Franz Hamann, 2011. "Lack of Credibility, Inflation Persistence and Disinflation in Colombia," BORRADORES DE ECONOMIA 008737, BANCO DE LA REPÚBLICA.
  2. Robert W. Rich & Charles Steindel, 2007. "A comparison of measures of core inflation," Economic Policy Review, Federal Reserve Bank of New York, issue Dec, pages 19-38.
  3. Michael F. Bryan & Stephen G. Cecchetti, 1993. "Measuring Core Inflation," NBER Working Papers 4303, National Bureau of Economic Research, Inc.
  4. Luis Eduardo Arango & Carlos Esteban Posada, 2007. "Los Salarios De Los Funcionarios Públicos En Colombia, 1978-2005," Ensayos sobre Política Económica, Banco de la Republica de Colombia, vol. 25(55), pages 110-147, Diciembre.
  5. Paula Herrera & Luie Eduardo Arango & Carlos Estéban Posada, 2007. "El salario mínimo aspectos generales sobre los casos de Colombia y otros paises," DOCUMENTOS DE ECONOMÍA 003944, UNIVERSIDAD JAVERIANA - BOGOTÁ.
  6. Enrique López Enciso, 2008. "Algunos hechos estilizados sobre el comportamiento de los precios regulados en Colombia," BORRADORES DE ECONOMIA 004999, BANCO DE LA REPÚBLICA.
  7. Hernando Vargas H., 2007. "The Transmission Mechanism of Monetary Policy in Colombia Major Changes and Current Features," BORRADORES DE ECONOMIA 003630, BANCO DE LA REPÚBLICA.
  8. Hernán Rincón, . "¿Los consumidores colombianos de combustibles reciben subsidios o, en neto, pagan impuestos?," Borradores de Economia 540, Banco de la Republica de Colombia.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:bdr:borrec:558. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Clorith Angélica Bahos Olivera)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.