Colombian Political Economy and the Coffee Cycle: 1967-1977

Abstract

An appraisal of the structural factors that determine price fluctuations in the Colombian coffee economy is object of study during the 1975-85 cycle. Some of the exchange determinants that affect the economy are considered particularly as a consequence of a sudden income rise due to coffee shortages in world markets due to Brazil's froze. Lack of macroeconomic differential mechanisms to isolate higher price effect introduces distortions in minor export competitiveness. Some other mechanisms like higher taxes to the coffee industry diverted to encourage diversification of the economy are suggested.