The Political Economy of Exchange Rate Policy in Colombia

Since the 1960s Colombia has exhibited notorious economic stability and institutional continuity. Until recently, the political system was based on an entrenched bipartisan coalition, with little ideological confrontation. Power sharing, which was mandatory during the National Front (NF, 1954-74), lasted until 1991. Coffee, the main export, is a labor-intensive activity, taking place in thousands of family-owned small plots. Coffee producer’s income depends on a complex arrangement whit the government, the exchange rate being but one component.

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