The Effects of Inflation on Interest Rates in Colombia 2005 - 2019
DOI:
https://doi.org/10.24054/face.v20i1.469Keywords:
Integración, precios, tendencia, tasa de interés, inflación, oferta monetariaAbstract
The objective of this work was to analyze the empirical evidence of the effects of inflation on long-term interest rates in Colombia during the period 2005 – 2019. It is the result of spontaneous research by the author aimed at conducting an empirical study with official data to test the consistency of the economic theory of the Fisher hypothesis. Information from the Banco de la Republica de Colombia for interest rates and the Departamento Administrativo Nacional de Estadística (DANE) for inflation was utilized. Descriptive statistics, measures of dispersion, as well as econometric techniques such as unit root tests and cointegration, were employed to determine the degree of integration of the two variables. Additionally, causality analyses were conducted using the Granger method. The Fisher hypothesis was used as the theoretical framework, which posits a relationship between future changes in nominal interest rates as a consequence of present and future inflation. The results reveal a high relationship between these two variables, as well as integration, leading to the conclusion that inflation determines the future behavior of interest rates in Colombia.
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