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Política monetaria contractiva en el control de la inflación: caso de estudio de las principales ciudades de Colombia
[Contractionary monetary policy in inflation control: A case study of Colombia's major cities]

Author

Listed:
  • Torres, Nicolás
  • Villarraga, Juan-Pablo
  • Sánchez, Wendy
  • Upegui, Sebastián

Abstract

This paper analyzes the effects of a contractionary monetary policy on the Consumer Price Index (CPI) in Colombia and its 13 main cities between January 2001 and February 2020. For this purpose, Vector Autoregression models (VAR) are used, from which impulse-response functions are obtained. Among the results, it is found that, in the face of a shock, the CPI in most cities begins to fall strongly between months 19 and 20, and loses statistical significance in general in months 23 and 24. Likewise, the CPI of Manizales and Villavicencio has a higher reaction speed in the face of an innovation in interest rates, which could suggest that the credibility of the Central Bank differs between cities.

Suggested Citation

  • Torres, Nicolás & Villarraga, Juan-Pablo & Sánchez, Wendy & Upegui, Sebastián, 2023. "Política monetaria contractiva en el control de la inflación: caso de estudio de las principales ciudades de Colombia [Contractionary monetary policy in inflation control: A case study of Colombia'," MPRA Paper 121192, University Library of Munich, Germany, revised 2023.
    • Handle: RePEc:pra:mprapa:121192
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    inflation; contractionary monetary policy; shocks;
    All these keywords.

    JEL classification:

    • E43 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Interest Rates: Determination, Term Structure, and Effects
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • E63 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Comparative or Joint Analysis of Fiscal and Monetary Policy; Stabilization; Treasury Policy
    • N16 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Latin America; Caribbean

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