MODELING MONETARY POLICY DECISIONS IN A DISCRETE FRAMEWORK, THE CASE OF MEXICO, 2004-2012
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Abstract
This research seeks to explain how Banco de México (Banxico) monetary policy responds to information from relevant macroeconomic variables, as well as the performance of Mexico’s Federal Treasury Certificates (zero-coupon bonds called Cetes) and variables in commercial bank financing, to achieve price stability. For this purpose, we develop an ordered multinomial probit model to calculate the probabilities of three possible movements in the target interest rate (that the interest rate increase by 25 basis points [bps] or more, remain unchanged, or fall by 25 bps or more). Jumps are calculated through lags in the dependent variable. Finally, we simulate the dependent variables through probability graphs for Mexico between 2004 and 2012.
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How to Cite
Téllez-León, I. E., & Venegas-Martínez, F. (2015). MODELING MONETARY POLICY DECISIONS IN A DISCRETE FRAMEWORK, THE CASE OF MEXICO, 2004-2012. Investigación Económica, 72(284). Retrieved from https://revistas.unam.mx/index.php/rie/article/view/50476
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