Colombia: Selected Issues

International Monetary Fund

No 2017/139, IMF Staff Country Reports from International Monetary Fund

Abstract: This Selected Issues paper assesses the monetary policy stance and broad financial conditions in Colombia. It uses a dynamic stochastic general equilibrium model of a small open economy to estimate the neutral rate. A financial conditions index is also constructed to assess overall financial conditions through three different transmission channels (credit, leverage, risk) of the financial sector to the state of the economy. Results reveal that both monetary policy and broad financial conditions in Colombia remained tight in 2016. The results also show that tighter financial conditions could have had a sizable impact on GDP growth.

Keywords: ISCR; CR; reform; VAT; monetary policy stance; reaction function; house price; monetary policy transmission mechanism; monetary policy tightening; VAT revenue; Housing prices; Mortgages; Housing; Central bank policy rate; Corporate income tax; Global; Europe (search for similar items in EconPapers)
Pages: 47
Date: 2017-05-31
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Persistent link: https://EconPapers.repec.org/RePEc:imf:imfscr:2017/139

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