Ítem
Acceso Abierto
Modelling the monetary policy reaction function of the Colombian Central Bank
Título de la revista
Autores
Otero Cardona, Jesús Gilberto
Ramírez Gómez, Manuel
Fecha
2008-04
Directores
ISSN de la revista
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Editor
Universidad del Rosario
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Resumen
Abstract
This paper proposes a simple Ordered Probit model to analyse the monetary policy reaction function of the Colombian Central Bank. There is evidence that the reaction function is asymmetric, in the sense that the Bank increases the Bank rate when the gap between observed inflation and the inflation target (lagged once) is positive, but it does not reduce the Bank rate when the gap is negative. This behaviour suggests that the Bank is more interested in fulfilling the announced inflation target rather than in reducing inflation excessively. The forecasting performance of the model, both within and beyond the estimation period, appears to be particularly good.
Palabras clave
Keywords
Monetary policy reaction function , Ordered Probit model , Central Bank independence , Colombia
Buscar en:
Otero, J., & Ramírez, M. (2008). Modeling the monetary policy reaction function of the colombian central bank. Bogotá: Universidad del Rosario.
