Output Gap and Neutral Interest Measures of Colombia

Andres Gonzalez, Sergio Ocampo, Julián Pérez and Diego Rodriguez Guzman ()
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Julián Pérez: Banco de la República, Colombia

Monetaria, 2013, vol. I, issue 2, 231-286

Abstract: Three new measures of the Colombian output gap and the real neutral interest rate are proposed. Instead of relying only on statistical filters, the proposed measures use semi-structural New Keynesian models, adapted for a small open economy. The output gap measures presented are in line with previous works for Colombia and capture all the turning points of the Colombian business cycle, as measured by Alfonso et al., 2011. They are also strongly correlated with inflation and precede its movements along the sample. The neutral interest rate computed indicates that the monetary policy stance has been overall countercyclical, but has failed to anticipate the output gap’s movements, or at least react strongly enough to them.

Keywords: output gap; New Keynesian model; neutral interest rate (search for similar items in EconPapers)
JEL-codes: E23 E32 E43 (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (4)

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Related works:
Working Paper: Output gap and Neutral interest measures for Colombia (2012)
Working Paper: Output gap and Neutral interest measures for Colombia (2012)
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