Inflation, Uncertainty, and Growth in Colombia

Author/Editor:

Henry Ma

Publication Date:

November 1, 1998

Electronic Access:

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Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

It has been argued that higher levels of inflation lead to greater uncertainty about future inflation and to greater dispersion of relative prices. In either case, inflation could reduce the efficiency of market prices in coordinating economic activities. This paper shows that the rise of inflation in Colombia, from low levels in the 1950s to average rates of 18–22 percent since the 1970s, has been accompanied by increased uncertainty and relative price dispersion; and that inflation has had a negative and persistent effect on real GDP growth.

Series:

Working Paper No. 1998/161

Subject:

Inflation Prices

English

Publication Date:

November 1, 1998

ISBN/ISSN:

9781451981582/1018-5941

Stock No:

WPIEA1611998

Pages:

30

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