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Maria E. García is a graduate student and Fulbright Scholar at the State University of New York-Albany and holds degrees from the Universidad Javeriana-Bógota and Universidad de los Andes-Bógota. The author is grateful to Professor Kajal Lahiri for helpful comments and suggestions.
Real GDP was obtained from the “Departamento Nacional de Planeacion.” Money (M1), the consumer price index, the wholesale price index (WPI), the coffee price, and exchange rate were obtained from the International Financial Statistics; oil prices from the Energy Information Administration; rural wages from the “Departamento Administrativo Nacional de Estadistica DANE”; nominal interest rate for time deposits (90 days) from the “Banco de la Republica”; and the real interest rate was computed as the nominal rate minus the inflation rate.