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La Financiación del Déficit del Gobierno Central: Sus Costos Económicos y la Independencia Del Banco Central en Colombia desde 1991
[National Government Deficit Financing:Economic Costs and Central Bank Independence in Colombia since 1991]


  • Parada, Jairo
  • Albor, Cristina


Since 1991, public finance of the Colombian Central Government reveals an explosive pattern in the burden in terms of GDP of interest payments of public debt, reaching levels over 4%. This behavior is deeply connected with a debt financing public policy based on issuing public debt in the private financial market subjected to oligopolistic rates determined by a small group of financial agents that are price makers. This work is oriented to establish the macroeconomic effects of the reorientation of public debt financing policy in Colombia since the Constitution of 1991 was implemented, developing a theoretical, institutional and empirical inquiry regarding the causes of the explosive growth of the domestic public debt observed, based on orthodox recommendations inspired on the Washington consensus and the so called new consensus in Macroeconomics. These assumptions privileged inflation targeting and the almost absolute impossibility of using primary emission as a less expensive central government deficit financing, which forced the government to lend in private financial markets with higher social and economic costs compared with the same variables in previous decades.

Suggested Citation

  • Parada, Jairo & Albor, Cristina, 2011. "La Financiación del Déficit del Gobierno Central: Sus Costos Económicos y la Independencia Del Banco Central en Colombia desde 1991 [National Government Deficit Financing:Economic Costs and Central," MPRA Paper 52985, University Library of Munich, Germany, revised 06 Oct 2011.
  • Handle: RePEc:pra:mprapa:52985

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    References listed on IDEAS

    1. Jorge Ramos F. & Norberto Rodríguez, 1995. "Déficit fiscal y tasas de interés en Colombia," Revista ESPE - Ensayos sobre Política Económica, Banco de la Republica de Colombia, vol. 14(27), pages 39-61, June.
    2. Rodrigo Suescún, 1992. "Inflación y devaluación como un fenómeno fiscal: la financiación óptima del gobierno a través de la tributación, el senoreaje y las utilidades por compraventa de divisas," Revista ESPE - Ensayos Sobre Política Económica, Banco de la República, vol. 11(22), pages 7-50, December.
    3. Riccardo Marselli, 1993. "Treasury Financing and Bank Lending-Reserves Causality: The Case of Italy, 1975–1990," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 15(4), pages 571-588, July.
    4. L. Randall Wray, 1998. "Understanding Modern Money," Books, Edward Elgar Publishing, number 1668, Summer.
    5. William Easterly., 1991. "La macroeconomía del déficit del sector público: el caso de Colombia," Revista ESPE - Ensayos Sobre Política Económica, Banco de la República, vol. 10(20), pages 107-144, December.
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    More about this item


    Public finance; fiscal policy; public debt; Colombia;
    All these keywords.

    JEL classification:

    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • H62 - Public Economics - - National Budget, Deficit, and Debt - - - Deficit; Surplus


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