The Central Bank in Colombia

Alberto Alesina, Alberto Carrasquilla () and Roberto Steiner

No 2458, Working Papers Series. Documentos de Trabajo from Fedesarrollo

Abstract: In the last decade the issue of the optimal degree of central bank independence has been at the center of attention of academics and policymakers in many countries. The direction of institutional reform has almost universally been toward making central banks more independent from political pressure. The motivation of this move is linked to an increased emphasis on price stability as the main or only goal of monetary policy after two decades of exceptionally high inflation rates. Colombia has made an effort in reforming a complex set of monetary institutions, which for over two decades delivered a persistent, moderate rate of inflation. The central bank reform -along with the elimination of many indexation practices, the liberalization of financial activity and the reduction of trade and capital account barriers- delivered substantial progress. This paper argues that a reduced set of "second generation" reforms aimed at correcting limitations that were maintained may further deepen these accomplishments. We propose to make the board of the bank smaller and to remove any members of the executive from it. An appropriate timing of appointments should also create stability in the board.

Keywords: Bancos Centrales; Política Monetaria; Independencia de la Banca Central; Instituciones Financieras; Economía Institucional; Reformas Institucionales (search for similar items in EconPapers)
JEL-codes: E50 E51 E52 E58 (search for similar items in EconPapers)
Pages: 20
Date: 2000-08-31
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://hdl.handle.net/11445/826

Related works:
Working Paper: The Central Bank in Colombia (2000)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:col:000123:002458

Access Statistics for this paper

More papers in Working Papers Series. Documentos de Trabajo from Fedesarrollo Contact information at EDIRC.
Bibliographic data for series maintained by Patricia Monroy ().