Disinflation Costs Under Inflation Targeting in Small Open Economy

Borradores de Economia
Número: 
328
Publicado: 
Clasificación JEL: 
E31, E32, E52, F41
Palabras clave: 
Small open economy, Inflation Targeting, Compensation, Colombia

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Since 1991, inflation in Colombia was reduced from 25% on average to about 6% more recently. Although this performance is in line with a long run inflation target of 3%, some analysts ask whether the Central Bank should continue disinflating. In this pa