Inflation targeting and an optimal Taylor rule for an open economy: evidence for Colombia 1990-2011
An optimal monetary policy Taylor rule is developed for an open economy, which we then estimate following a Markov regime-switching model for quarterly data from Colombia during 1990-2011. We find two opposite monetary regimes characterized by different policy rules: until October 2000 the Central B...
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| Veröffentlicht in: | Cuadernos de economía (Santiago) 2014-05, Vol.51 (1), p.41-83 |
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| container_title | Cuadernos de economía (Santiago) |
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| creator | Villa, Edgar Misas, Martha A Giraldo, Andrés F |
| description | An optimal monetary policy Taylor rule is developed for an open economy, which we then estimate following a Markov regime-switching model for quarterly data from Colombia during 1990-2011. We find two opposite monetary regimes characterized by different policy rules: until October 2000 the Central Bank of Colombia reacted only statistically to output gap changes while after October 2000, when inflation targeting was officially adopted, monetary policy reacted only statistically to changes in the inflation rate. The latter regime is consistent with the Taylor principle as shown analytically and verified empirically by a unit root test for a Markov regime-switching model. |
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The latter regime is consistent with the Taylor principle as shown analytically and verified empirically by a unit root test for a Markov regime-switching model.</description><subject>Colombia</subject><subject>Estimation</subject><subject>Inflation targeting</subject><subject>Markovian processes</subject><subject>Monetary policy</subject><subject>Open economies</subject><subject>Output gap</subject><subject>Statistical analysis</subject><subject>Taylor rule</subject><subject>Unit root</subject><issn>0717-6821</issn><fulltext>true</fulltext><rsrctype>article</rsrctype><creationdate>2014</creationdate><recordtype>article</recordtype><recordid>eNqVissOgjAURLvQRHz8w126IWlBBNwSje7Zk1oupKb0Ii0m_L1E_QEXk5mcMwsW8FSk4TGLxIqtnXtwHs0kDpi62cZIr8mCl0OLXtsWpK3nAPVed9JAKSdDAwyjQWjm8VFoARVZ6qYT4EvXaNXXFmSou2sJIs95GHEhtmzZSONw9-sN21_OZXEN-4GeIzpfddopNEZapNFVIokPUZLzJIv_uL4BbcBHew</recordid><startdate>20140501</startdate><enddate>20140501</enddate><creator>Villa, Edgar</creator><creator>Misas, Martha A</creator><creator>Giraldo, Andrés F</creator><scope>8BJ</scope><scope>FQK</scope><scope>JBE</scope></search><sort><creationdate>20140501</creationdate><title>Inflation targeting and an optimal Taylor rule for an open economy: evidence for Colombia 1990-2011</title><author>Villa, Edgar ; Misas, Martha A ; Giraldo, Andrés F</author></sort><facets><frbrtype>5</frbrtype><frbrgroupid>cdi_FETCH-proquest_miscellaneous_15342590583</frbrgroupid><rsrctype>articles</rsrctype><prefilter>articles</prefilter><language>eng</language><creationdate>2014</creationdate><topic>Colombia</topic><topic>Estimation</topic><topic>Inflation targeting</topic><topic>Markovian processes</topic><topic>Monetary policy</topic><topic>Open economies</topic><topic>Output gap</topic><topic>Statistical analysis</topic><topic>Taylor rule</topic><topic>Unit root</topic><toplevel>online_resources</toplevel><creatorcontrib>Villa, Edgar</creatorcontrib><creatorcontrib>Misas, Martha A</creatorcontrib><creatorcontrib>Giraldo, Andrés F</creatorcontrib><collection>International Bibliography of the Social Sciences (IBSS)</collection><collection>International Bibliography of the Social Sciences</collection><collection>International Bibliography of the Social Sciences</collection><jtitle>Cuadernos de economía (Santiago)</jtitle></facets><delivery><delcategory>Remote Search Resource</delcategory><fulltext>fulltext</fulltext></delivery><addata><au>Villa, Edgar</au><au>Misas, Martha A</au><au>Giraldo, Andrés F</au><format>journal</format><genre>article</genre><ristype>JOUR</ristype><atitle>Inflation targeting and an optimal Taylor rule for an open economy: evidence for Colombia 1990-2011</atitle><jtitle>Cuadernos de economía (Santiago)</jtitle><date>2014-05-01</date><risdate>2014</risdate><volume>51</volume><issue>1</issue><spage>41</spage><epage>83</epage><pages>41-83</pages><issn>0717-6821</issn><abstract>An optimal monetary policy Taylor rule is developed for an open economy, which we then estimate following a Markov regime-switching model for quarterly data from Colombia during 1990-2011. 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| ispartof | Cuadernos de economía (Santiago), 2014-05, Vol.51 (1), p.41-83 |
| issn | 0717-6821 |
| language | eng |
| recordid | cdi_proquest_miscellaneous_1534259058 |
| source | Elektronische Zeitschriftenbibliothek - Frei zugängliche E-Journals |
| subjects | Colombia Estimation Inflation targeting Markovian processes Monetary policy Open economies Output gap Statistical analysis Taylor rule Unit root |
| title | Inflation targeting and an optimal Taylor rule for an open economy: evidence for Colombia 1990-2011 |
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