Colombia: Selected Issues

International Monetary Fund

No 2008/032, IMF Staff Country Reports from International Monetary Fund

Abstract: This paper quantifies the dynamic effects of fiscal policy using a structural model, the Global Integrated Monetary and Fiscal Model (GIMF). The analysis finds that success of fiscal policy in enhancing macroeconomic stability depends on the type of shock, the response of monetary policy, and the length of fiscal policy implementation lags. The paper also presents the basic structure of the Bayesian VAR describing its empirical implementation and the estimation results and results from the conditional forecasting exercise and remarks. It also assesses Colombia’s experience with central bank foreign exchange intervention between 2004 and 2007.

Keywords: ISCR; CR; central bank intervention; GDP growth; monetary policy shock; fiscal policy response; lending rate; treasury bill; implementation lag; inflation-output volatility tradeoff; Exchange rates; Return on investment; Fiscal stance; Central bank operations; Global (search for similar items in EconPapers)
Pages: 77
Date: 2008-01-28
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