Cover IMF Working Papers
Output Fluctuations and Monetary Shocks: Evidence From Colombia
Author: Mr. Vincent Reinhart and Ms. Carmen Reinhart
Series:
IMF Working Papers
Volume/Issue:
Volume 1991: Issue 035
Language:
English
Publication Date:
01 Mar 1991
DOI:
https://doi.org/10.5089/9781451978353.001
ISBN:
9781451978353
ISSN:
1018-5941
Pages:
34
Keywords:
WP; exchange rate; money stock; interest rate; price level; interest rate equation; policy variable; price equation; prices trace; compound terms; correlation matrix; World coffee price; monetary policy; Exchange rates; Monetary base; Wages; Inflation; Real exchange rates
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IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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Using annual data for Colombia over the last thirty years and a new battery of econometric techniques, we test opposing theories that explain macroeconomic fluctuations: The neoclassical synthesis, which posits that, in the presence of temporary price rigidity, an unanticipated monetary expansion produces output gains that erode over time with increases in the price level; and an alternative explanation, which focuses on “real” technological or preference shocks as the sources of output changes. The coefficients from these systems are used to examine two basic propositions: the long-run neutrality of nominal quantities with respect to permanent movements in the money stock; and the short-run sensitivity of output to inflation.
Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund

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