TY - BOOK ID - 84540618 TI - Exchange Rate Bands and Shifts in the Stabilization Policy Regime : Issues Suggested by the Experience of Colombia PY - 1995 SN - 1462332897 1455207098 1281258474 1455217069 9786613778062 PB - Washington, D.C. : International Monetary Fund, DB - UniCat KW - Foreign Exchange KW - Inflation KW - Open Economy Macroeconomics KW - Price Level KW - Deflation KW - Development Planning and Policy: Trade Policy KW - Factor Movement KW - Foreign Exchange Policy KW - Currency KW - Foreign exchange KW - Macroeconomics KW - Real exchange rates KW - Exchange rates KW - Crawling peg KW - Exchange rate policy KW - Prices KW - Colombia UR - https://www.unicat.be/uniCat?func=search&query=sysid:84540618 AB - After 25 years, the Colombian authorities decided to abandon the crawling peg exchange rate policy and implement a regime of nominal exchange rate bands. Initial conditions in Colombia contrast sharply with those of other cases in which bands were part of an ongoing effort to reduce high inflation. This paper argues that the change in regime was motivated by a change in policy objectives. Starting from a policy whose rationale implied targeting stable inflation, a simple analytical model of optimal policy is presented; initial results with the new regime suggest that inflation is now considered costlier and that policy implementation has been consistent with this new view. ER -