TY - BOOK ID - 85290056 TI - Explaining Inflation in Colombia: A Disaggregated Phillips Curve Approach AU - Lanau, Sergi. AU - Robles, Adrian. AU - Toscani, Frederik. PY - 2018 SN - 1484356330 1484356314 PB - Washington, D.C. : International Monetary Fund, DB - UniCat KW - Unemployment KW - Inflation (Finance) and unemployment KW - Stagflation KW - Inflation (Finance) KW - Stagnation (Economics) KW - Effect of inflation on. KW - Foreign Exchange KW - Inflation KW - Macroeconomics KW - Forecasting KW - Production and Operations Management KW - Price Level KW - Deflation KW - Prices, Business Fluctuations, and Cycles: Forecasting and Simulation KW - Macroeconomics: Production KW - Forecasting and Other Model Applications KW - Currency KW - Foreign exchange KW - Economic Forecasting KW - Output gap KW - Exchange rates KW - Consumer price indexes KW - Economic forecasting KW - Prices KW - Production KW - Economic theory KW - Price indexes KW - Colombia UR - https://www.unicat.be/uniCat?func=search&query=sysid:85290056 AB - We study inflation dynamics in Colombia using a bottom-up Phillips curve approach. This allows us to capture the different drivers of individual inflation components. We find that the Phillips curve is relatively flat in Colombia but steeper than recent estimates for the U.S. Supply side shocks play an important role for tradable and food prices, while indexation dynamics are important for non-tradable goods. We show that besides allowing for a more detailed understanding of inflation drivers, the bottom-up approach also improves on an aggregate Phillips curve in terms of forecasting ability. In the baseline forecast scenario, both headline and core inflation converge towards the Central Bank’s inflation target of 3 percent by end-2018 but these favorable inflation dynamics are vulnerable to large supply shocks. ER -