Open-Economy Inflation Targeting
TL;DR: The authors extended previous analysis of closed-economy inflation targeting to a small open economy with forward-looking aggregate supply and demand, and with stylized realistic lags in the different transmission channels for monetary policy.
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Abstract: The paper extends previous analysis of closed-economy inflation targeting to a small open economy with forward-looking aggregate supply and demand, and with stylized realistic lags in the different transmission channels for monetary policy. The paper compares targeting of CPI and domestic inflation, strict and exhibitable inflation targeting, inflation targeting instrument rules and the Taylor Rule, and inflation targeting and exchange-rate targeting. The paper also clarifies how a conditional inflation forecasts can be consistently constructed and used as an intermediate target variable when there are forward-looking expectations.
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Citations
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Is there a trade-off between inflation variability and output-gap variability in the EMU countries?
Philip Arestis,Kostas Mouratidis +1 more
TL;DR: In this article, the authors compare the monetary policy performance of eleven EMU countries for the whole period of the EMS and for two sub-periods (i.e., before and after the Maastricht Treaty) and find that asymmetries exist in the euro area as a result of either different monetary policy preferences or different economic structures among the EMU's member countries.
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Inflation–output trade-offs in an optimization-based econometric framework applied to an open economy: The case of Japan
TL;DR: In this article, an optimization-based econometric framework was applied to an open economy for the evaluation of monetary policy, and the authors examined the dissolving of inflation-output trade-offs, or improving social welfare through inflation targeting by using data for Japan.
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Impact of Exchange Rate on Macroeconomic Indicators
Aleksandre Ergeshidze
- 01 Feb 2018
TL;DR: In this paper, the authors quantify impact of change in nominal exchange rate and test contractionary depreciation hypothesis on Georgian economy using structural and Bayesian vector autoregression, and acquired results show that appreciation of nominal exchange rates is expected to decrease inflation, monetary policy rate, interest rate on domestic currency loans and economic growth in the medium run; however, impact on economic growth is statistically not significant.
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Comparing Constraints to Economic Stabilization in Macedonia and Slovakia: Macro Estimates with Micro Narratives
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Assessing Monetary Policy in Norway
Harald Magnus Andreassen,Paul De Grauwe,Paul De Grauwe,Paul De Grauwe,Haakon Solheim,Øystein Thøgersen,Øystein Thøgersen +6 more
TL;DR: In this article, the authors evaluate the policy of flexible inflation targeting implemented by the Norges Bank since March 2001 and discuss the reasons why the real interest rates are significantly higher in Norway than in the rest of Europe.
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Inflation Targeting: A New Framework for Monetary Policy?
TL;DR: Inflation targeting as discussed by the authors is a new strategy for monetary policy known as "inflation targeting," which has sparked much interest and debate among central bankers and monetary economists in recent years, characterized by the announcement of official target ranges for the inflation rate at one or more horizons, and explicit acknowledgment that low and stable inflation is the overriding goal of monetary policy.