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Acceso Abierto
Credit spreads and monetary policy in a small open economy: an analysis of the colombian economy
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Autores
Ballesteros, Alexander
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Fecha
2016-06-14
Directores
Bejarano Rojas, Jesús Antonio
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Editor
Universidad del Rosario
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Abstract
This paper estimates Bejarano and Charry (2014)’s small open economy with financial frictions model for the Colombian economy using Bayesian estimation techniques. Additionally, I compute the welfare gains of implementing an optimal response to credit spreads into an augmented Taylor rule. The main result is that a reaction to credit spreads does not imply significant welfare gains unless the economic disturbances increases its volatility, like the disruption implied by a financial crisis. Otherwise its impact over the macroeconomic variables is null.
Palabras clave
Optimal Monetary Policy , Credit Spreads , Bayesian Estimation , Colombia
Keywords
Optimal Monetary Policy , Credit Spreads , Bayesian Estimation , Colombia