The monetary short as an instrument of recessionary monetary policy (1998-2005)

Abstract

This paper presents an analysis of the instrument called "corto monetario", used by the Bank of Mexico (Banxico) to control inflation and promote economic growth. It analyzes the effectiveness of the application of this mechanism through the results obtained. It addresses the ideology behind the application of this measure, considering that the implementation of restrictive monetary policy cannot be understood without understanding the general program and the situation of the country that applies it. It describes the core elements that, according to international criteria, provide macroeconomic stability to countries. Illustrates the criteria and lines of action used by Banxico to apply the short monetary policy, as well as the landing of these measures according to their results. Mentions some divergent ideas about the ways to deal with inflation. It states how Banxico makes its lines of action effective, and presents an econometric model that analyzes the effectiveness of the short monetary policy in Mexico, as well as the conclusions derived from its application.