Revista de Economía Institucional
Print version ISSN 0124-5996
HOFSTETTER, Marc. MONETARY POLICY AND CONSTITUTIONAL COURT: THE MINIMUM WAGE CASE. Rev.econ.inst. [online]. 2006, vol.8, n.14, pp. 105-124. ISSN 0124-5996.
In 1999 the Colombian Constitutional Court ruled that annual minimum wage increases should not be lower than the inflation of the previous year. This article explores the impact of this decision on the effectiveness of monetary policy, and shows that the obligation to adjust the salary to past inflation leads monetary policy to have more effect on real activity and generates more persistent inflation.
Keywords : monetary policy; Constitutional Court; minimum salary; inflation.