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Print version ISSN 0120-4483


GIL LEON, José Mauricio. Relationship between monetary policy and financial stability: An analysis applied to Colombia. Ens. polit. econ. [online]. 2015, vol.33, n.77, pp.133-148. ISSN 0120-4483.

This paper analyzes the relationship between monetary policy decisions and financial stability conditions, considering the asset prices as the key variable. The econometric estimates show that the Banco de la República has not had any response between 1996 and 2012 to the variables associated with financial stability, such as the gap in asset prices and credit. In this sense, we adapt and calibrate a theoretical model that shows that when the central bank responds to the gap in asset prices there is greater inancial stability. Therefore one can see that the gaps in share prices and housing prices respond positively to a monetary expansion, defining with it the existence of a mechanism by which the Central Bank of Colombia will affect the inancial stability.

Keywords : Monetary policy; Financial stability; Asset prices; Taylor rule; Interest rate.

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