Inflation Aversion and the Taylor Rule in Colombia, 1994-2005

Cuadernos de Economía, Vol. 27, No. 49, 2008

34 Pages Posted: 15 Jan 2010 Last revised: 30 Dec 2016

See all articles by Andres Giraldo

Andres Giraldo

Southern Methodist University; Pontificia Universidad Javeriana

Date Written: December 30, 2008

Abstract

This article provides an estimation of inflation aversion and cycles on the part of the Banco de la República (Colombia’s central bank) for the period 1994-2005, using a space-state structure and the Kalman Filter method. It shows that the parameter that measures aversion to the product gap is not significant. It concludes that the inflation aversion parameter fulfills the Taylor Principle (it takes on a value greater than one) and that according to the sample and the estimation carried out on it, the only variable to which the central bank reacts is the inflationary gap.

Note: Downloadable document is in Spanish.

Keywords: Inflation, monetary policy rules, Colombia

JEL Classification: E42, E52

Suggested Citation

Giraldo, Andrés Felipe, Inflation Aversion and the Taylor Rule in Colombia, 1994-2005 (December 30, 2008). Cuadernos de Economía, Vol. 27, No. 49, 2008. Available at SSRN: https://ssrn.com/abstract=1535562

Andrés Felipe Giraldo (Contact Author)

Southern Methodist University ( email )

Dallas, TX 75275
United States

Pontificia Universidad Javeriana ( email )

Carrera 7 No. 40-62
Bogotá DC
Colombia

HOME PAGE: http://https://sites.google.com/site/afgiraldo/

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