TY  - JOUR
AU  - Edwards,Sebastian
TI  - Money, The Rate of Devaluation and Interest Rates in a Semi-Open Economy:  Colombia 1968-1982
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 1380
PY  - 1985
Y2  - April 1985
UR  - http://www.nber.org/papers/w1380
L1  - http://www.nber.org/papers/w1380.pdf
N1  - Author contact info:
Sebastian Edwards
UCLA Anderson Graduate School of Business
110 Westwood Plaza, Suite C508
Box 951481
Los Angeles, CA 90095-1481
Tel: 310/206-6797
Fax: 310/206-5825
E-Mail: sebastian.edwards@anderson.ucla.edu
AB  - In this paper an empirical model for analyzing the behavior of nominal interest rates in a semi-open economy is developed. The model explicitly incorporates both the role of open economy factors (i.e., world interest rates, expected rate of devaluation) and domestic monetary conditions in explaining interest rates movement. The model is tested using quarterly data for Colombia for 1968-1982. The results obtained indicate that the semi-open characterization is adequate for the case of Colombia, and that world interest rates, the rate of devaluation and domestic monetary conditions have affected domestic nominal interest rates during the period under consideration. The results also indicate that unanticipated increases in the nominal quantity of money have exercised a negative effect on nominal interest rates in Colombia.
ER  -