Munich Personal RePEc Archive

Estimación de una Función de Reacción para la Política Monetaria en Bolivia

Cernadas, Luis and Aldazosa, René (2011): Estimación de una Función de Reacción para la Política Monetaria en Bolivia. Published in: Revista Monetaria , Vol. Vol. X, No. Centro de Estudios Monetarios Latinoamericanos (January 2011): pp. 1-36.

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Abstract

The paper models the behavior of the Central Bank of Bolivia, through the estimation of reaction functions. According to the monetary program, the central bank implements its policy through the use of monetary aggregates. However, given the crawling peg exchange rate regime, the nominal exchange rate became a very important variable for economic policy management. Additionally, the reduction in levels of dollarization have caused an improvement in the transmission mechanism from interest rates to prices. Thus, we estimate three reaction functions: one for the nominal exchange rate, other for the interest rate and other for the net loans. The results indicate that this variable adequately explains the stance of the monetary authority.

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