Macroeconomic Effects of Structural Fiscal Policy Changes in Colombia

Hernando Vargas-Herrera, Andres Gonzalez and Ignacio Lozano-Espitia

No 9314, Borradores de Economia from Banco de la Republica

Abstract: In the past decade the Colombian Economic Authorities undertook a series of measures that reduced the structural fiscal deficit, decreased the Government currency mismatch and deepened the local fixed-rate public bond market. This paper presents some evidence suggesting that these improvements had important effects on the behavior of the macroeconomy. They seem to have permanently reduced the sovereign risk premium, increased the reaction of output to Government expenditure shocks and strengthened the response of market interest rates to monetary policy shocks.

Keywords: Fiscal Policy; Macroeconomy; Monetary Policy and Real Interest. (search for similar items in EconPapers)
JEL-codes: E43 E52 E58 E62 H63 H68 (search for similar items in EconPapers)
Pages: 44
Date: 2012-02-08
New Economics Papers: this item is included in nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (21)

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Related works:
Chapter: Macroeconomic effects of structural fiscal policy changes in Colombia (2012)
Working Paper: Macroeconomic Effects of Structural Fiscal Policy Changes in Colombia (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:col:000094:009314

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