EFFICIENT POLICY RULE FOR INFLATION TARGETING IN COLOMBIA

Martha López

No 2437, Borradores de Economia from Banco de la Republica

Abstract: In a small macroeconomic model of the Colombian economy I investigate the problem of selecting a policy rule that is consistent with inflation targeting. I spell out the characteristics of the optimal feedback and output parameters in the rule, as well as for the optimal forecasting horizon for inflation targeting. Using stochastic simulations of the model it is found that, as expected, rules that use forecasts of inflation rather than just contemporaneous inflation have better stabilization properties.

Pages: 17
Date: 2003-04-30
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Citations: View citations in EconPapers (6)

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Related works:
Journal Article: Efficient Policy Rule for Inflation Targeting in Colombia (2004)
Journal Article: Efficient Policy Rule for Inflation Targeting in Colombia (2004)
Journal Article: Efficient policy rule for inflation targeting in Colombia (2004)
Working Paper: Efficient Policy Rule for Inflation Targeting in Colombia (2003)
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Persistent link: https://EconPapers.repec.org/RePEc:col:000094:002437

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