We estimate the Break Even Inflation using the nominal and real government Colombian bonds for the period January 2003 to November 2009. This measure is decomposed in inflation expectations and inflation risk premium. The inflation expectations are calculated using a state-space representation...

Taking into account the risk premium within Fisher equation and the rapid decrease of inflation in Colombia at the end of last decade we test the hypothesis of linearity for the expected inflation differentials between 6 and 12 months ahead built by assuming four different expectation mechanisms...

Data from the USA and the UK markets is used to re-estimate the capability of the Federal Reserve and Bank of England to affect the interest rates. The evidence shows that these reactions are smaller than the originals of Cook and Hahn (1989). When such an equation is modified to allow for...