Does Independence Matter? Case Studies from Colombia

Mauricio Cardenas and Zeinab Partow

No 3039, Research Department Publications from Inter-American Development Bank, Research Department

Abstract: This study consists of two parts: I. ) Does Independence Matter? The Case of the Colombian Central Bank, andII. ) Does Independence Improve Performance? The Colombian Superintendency of Banks. Why has Colombia been a case of low output variability and moderate-to-high inflation? This paper argues that regardless of the institutional arrangement, monetary authorities have stabilized the business cycle, and inflation control has not been the only objective of monetary policy. The government-controlled Junta Monetaria (1963-1991) often ignored the advice of the Asesores, an anti-inflation group of technocrats who had no voting powers. Since 1991 the independent and powerful members of Junta Directiva have been engaged in inflation targeting but continue to place weight on output and employment stabilization in their objective function. Institutional reform has implied a slow reduction in inflation. For a faster decline, the current system requires either greater accountability (for not meeting the inflation targets) or less weight on output stabilization.

Date: 1998-10
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.iadb.org/research/pub_hits.cfm?pub_id=R ... le_name=pubR-341.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 404 Not Found (http://www.iadb.org/research/pub_hits.cfm?pub_id=R-341&pub_file_name=pubR-341.pdf [301 Moved Permanently]--> https://www.iadb.org/research/pub_hits.cfm?pub_id=R-341&pub_file_name=pubR-341.pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:idb:wpaper:3039

Access Statistics for this paper

More papers in Research Department Publications from Inter-American Development Bank, Research Department Contact information at EDIRC.
Bibliographic data for series maintained by Felipe Herrera Library ().