Definition and effectiveness of monetary policy in Mexico, an econometric and inductive causality study
DOI:
https://doi.org/10.24275/uam/azc/dcsh/ae/2024v39n102/VeraKeywords:
Monetary Policy, Taylor´s Rule , Directed Acyclic GraphsAbstract
This paper seeks to test the hypothesis that Banco de México defines its monetary interest rate policy based on other variables, far from the interest rate, going against the principles of the Taylor´s rule. An econometric study with Acyclic Directed Graphs (GDA) is proposed, which according to the bibliographic review would be a pioneering application in the object of this study, to measure causal relationships on various variables. The data was obtained from Banco de México and INEGI. The results reveal that the definition of the reference rate in Mexico is likely to follow the guidelines of the Federal Reserve in the United States, mostly.
JEL Classification: E52, E43, C32
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