Neutral interest rate and monetary policy for Mexico, 2020-2024
Por:
Sanchez Vargas, Armando, Martinez Ventura, Debora, Lopez-Herrera, Francisco
Publicada:
1 ene 2021
Categoría:
Economics and econometrics
Resumen:
Given the uncertainty in this regard, this paper analyzes the most
appropriate monetary policy position for Mexico, which aims to maintain
the inflation objective without negatively affecting product growth. The
value of the neutral interest rate in Mexico for the next five years is
estimated based on Taylor's rule and a co-integrated vector
autoregression (VAR) model (CVAR). The results suggest that the monetary
policy rate is above the neutral interest rate, which, combined with the
potential international rate cut, could grant the central bank for
almost the entire six-year period a degree of freedom to maintain its
rate below the current level; in the short term the current monetary
policy rate could be cut by at least 25 points without risking
convergence to the inflation target.
Filiaciones:
Sanchez Vargas, Armando:
Univ Nacl Autonoma Mexico, Inst Invest Econ, Mexico City, DF, Mexico
Martinez Ventura, Debora:
Univ Nacl Autonoma Mexico, Inst Invest Econ, Mexico City, DF, Mexico
Lopez-Herrera, Francisco:
Univ Nacl Autonoma Mexico, Div Invest, Fac Contaduria & Adm, Mexico City, DF, Mexico
All Open Access; Gold
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